Spreadex Market Update
Commodity woes and European fears keep markets in the red
A better than expected set of figures from Germany led to the region-wide numbers similarly out-performing analysts’ estimates, the highlight being a 4 year high for the Eurozone’s private sector growth. However the general bearish tone of Monday morning, with a combination of commodity woes and lingering fears following another tense weekend in Europe, meant the DAX could only shrink its losses by around 20 points to a 40 point drop, whilst the CAC actually widened its decline to 25 points.
With the commodity sector remaining resolute in its aim to best its recent lows the FTSE failed to muster much of a comeback as the morning went on. Gains for Home Retail Group (with the beleaguered Argos-owner the focus of some take-over speculation) and continued growth for the defence sector (namely Rolls-Royce Holdings and BAE Systems) did help the UK index narrow its losses to 40 points from its earlier nadir, but it still looks unlikely to climb into the green without some outside assistance.
Sadly for the FTSE, its normal white knight currently looks like it won’t be helping anyone this afternoon. The Dow is currently down around 25 points, with its own flash manufacturing PMI and existing home sales data to come. Both figures are expected to fall, which may help lift the Dow out of its futures slump; then again, it may not. The US indices were fairly inconsistent in their relationship with good and bad figures last week, so it will be interesting to see whether 2015’s traditionally rate hike-averse reaction to decent data returns or if the market’s muddled reaction continues.
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