Spreadex Market Update
Improvements in auto-sector allow European indices to post gains
A decent, if unspectacular, round of Eurozone manufacturing figures likely helped proceedings; more important has been the turnaround seen by Volkswagen. Up by around 3%, it appears that a wave of opportunistic buyers have poured in, lifting the auto-stock away from its earlier session lows to push it back towards the €110s; still, that is a long, long way from the €162 it ended last week at, and even further from the €250 mark it hit in March. Somehow CEO Martin Winterkorn is still at the helm of the company, an astonishing fact given that due to actions under his watch the company faces a world-wide investigation AND a likely class action lawsuit; it will be interesting to see if he is there by the end of the week.
Regardless, the improvement in the auto sector (however temporary) has helped the DAX and CAC climb around 0.7%, whilst the FTSE is the most robust of the European bunch, jumping over a percent (and crucially re-crossing 6000) as its mining stocks take back some of yesterday’s losses.
The main focus of this afternoon will likely be on ECB President Mario Draghi’s testimony in front of the European Parliament; investors will be on the lookout for his comments on China, any mention of Volkswagen and, perhaps most importantly, a hint of some extra QE stimulus in the coming months. In terms of the US open, the Dow looks set to jump around 20 points, a mild increase that could help take the edge off of the European indices.
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