Spreadex Market Update
Starting to see that the possibility of the Federal Reserve tapering stimulus
In a rather dramatic shift in sentiment, market participants are starting to see that the possibility of the Federal Reserve tapering stimulus at next Wednesday’s FOMC meeting is gaining in credibility. Both U.S & European indices are feeling the impact of this with the FTSE 100 on course for a sixth consecutive weekly drop for the first time since summer 2008. Whilst weakness has been seen across the board, the FTSE is being outperformed by many of its major European peers with sterling strength eating into the revenues of British exporters.
On a more positive note, the British Chamber of Commerce expect the British economy to expand at its fastest rate in 7 years in 2014, with strengthening household consumption a major contributor. However, high household debt could slow growth in 2015. The business group forecast economic growth to rise to 2.7 percent in 2014, an upgrade from the forecasts of 2.2 percent it made as recently as August. Output should pass its pre-recession peak in the second half of the year, more than six years after the financial crisis began.
Data today showed retail sales in the U.S. rose more than forecast in November as Americans bought cars and took advantage of discounts going into the holiday-shopping season. In a separate report, jobless claims surged by 68,000 to a two-month high of 368,000 in the period ended December 7th. U.S stock futures are little changed with investors weighing the data, constantly trying to gauge the timing of any cuts to Federal Reserve stimulus.
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