Spreadex Market Update
US markets lead afternoon rebound despite, or because of, mixed data
A big miss for this month’s PPI figure was countered by slightly improved unemployment claims data. This lead to strong gains for the Dow Jones, but what investors were reacting to was unclear; the rate-hike delaying power of a power PPI figure, or the improvements seen in the jobs sector? Regardless, growth is growth and the US markets led the charge for an afternoon rebound elsewhere.
Trying to predict, or even analyse, the current movements in the Eurozone, and the DAX especially, is not the most enjoyable task. After falling by around 100 points this morning, the German index is now up by around 1.5% on the day despite a lack of news from the region. In fact, any news from the region was negative, with the European Bank of Reconstruction and Development notably claiming that Greece would be in serious trouble is a deal isn’t reached soon, with a potential ‘major recession’ on the cards; like most comments about Greece of late the EBRD’s sentiment isn’t surprising, but remains worrying nonetheless. Not that this fazed the Eurozone. Taking its cue from the US, the DAX led the region’s indices to another afternoon of robust gains with the likely culprit Thursday’s renewed stability in the bond markets.
With the US and the Eurozone both posting strong afternoon growth, the FTSE couldn’t help but look a bit limp in comparison. Not to say the UK index wasn’t in the green; mid-percent gains saw FTSE well on its way to returning to 7000. This morning’s disastrous results from Vedanta Resources remained a drag for much of the day, even if the commodity sector’s fortunes did improve as Thursday came to a close, whilst GlaxoSmithKline suffered after UBS downgraded the pharmaceutical giant to ‘neutral’.
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