Spreadex Market Update

US stocks dropped shortly after the open



US stocks dropped shortly after the open as investors assess data which has showed an improving economy and whilst geopolitical concern takes its toll on confidence. If data continues to exceed estimates, this could give the Federal Reserve further ammunition to increase interest rates. By mid-day, the FTSE had erased all gains and dropped a further 50 points to 6656. Heavyweight mining and energy stocks took the brunt of the impact as investors took the side-lines to reconsider their options.

A speech from Bank of England Governor Mark Carney showed the time to increase the benchmark rate is getting closer. Sterling jumped on the news against the dollar to 1.6335. Mark Carney said strong growth and job creation meant the judgment about when to start raising rates from a record low of 0.5pc had become "more balanced".

Data today has pretty much been in line with expectations with both Core Durable Goods Orders and Unemployment Claims matched Wall Street estimates. The Core Goods Orders, which strips out aircraft and other volatile orders, came in at 0.7%. Unemployment Claims for the week came in as expected at 293,000, a slight increase from the 281,000 last week’s figure.

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