Spreadex Market Update
Markets lose momentum as limp (Trump-inspired?) opening from Dow dampens sentiment, before high crude inventories sees losses accelerate
Despite a better than expected ADP non-farm figure the Dow alternated between a near 80 point drop and a less alarming 10 point fall after the bell, suggesting a potentially negative reception for Friday’s jobs report if things look too perky. There has been little to cause the shift in sentiment between yesterday’s surge and today’s collective sigh; perhaps, with the floppy-haired, verbally flatulent Donald Trump near enough securing the Republican nomination, investors are mulling over the latest macro-catastrophe looming on the horizon.
Regardless, things were made worse by the US crude oil inventories figure, coming in at 10.4 million barrels against the 2.5 million expected. The FTSE, already dipping its toes in the red, fell by around 50 points as Brent Crude dropped by nearly 2%. The DAX and CAC were left looking similarly deflated, falling by around 20 points each.
Like Tuesday’s manufacturing onslaught Thursday tasks the global indices with enduring what is set to be a similarly worrisome wave of services PMIs. Analysts are expecting the region-wide Eurozone figure to be confirmed at a 14 month low of 53.0, whilst the UK number is forecast to slip from 55.6 to 55.1. The double dose of US data, meanwhile, is expected to paint an even uglier picture, with both the Markit and ISM figures forecast at 49.8, an especially sharp drop-off for the latter. It will be interesting to see, then, if the markets can throw two fingers up to the weak data like they did on Tuesday, or whether they will continue to stumble like they have this Wednesday afternoon.
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