Spreadex Market Update

Markets take a dive as Covid cases continue to rise, and traders expect rate hikes



European stocks take a tumble today as the FTSE (-0.70%), DAX (-1.22%) and CAC (-1.40%) are all in the red.

This is likely due, not only to the further rise in Covid-19 cases across the continent, but also thanks to the anticipation of an earlier than expected rate increase in the US.

Most of the banks are benefiting from the possibility of rate rises, but that is not enough to lift most of the indices.

Investors are also worried by Michael Gove’s cladding bill, as house builders lost more than £1 billion in value today.

The government has given the industry just a few weeks to create a fully costed plan to fix all unsafe buildings with building cladding, between 11 and 18 meters tall.

This of course caused a slump in house builders’ shares, as Persimmon is currently down over 5%.

In the US stocks have dipped even lower, as the DOW and S&P are both down over 1%, with technology stocks at the bottom, thanks to investors expectation of higher interest rates.

Most of the worry stems from the Fed’s December meeting minutes being released last week, as some officials were eyeing a quicker start to the interest rate hike.

This also caused Goldman Sachs to predict the Fed to raise the rates 4 times this year, which is one more than they had previously forecast.

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