Spreadex Market Update
USA sees misses in industry, manufacturing and consumer sentiment
Big missteps in US Empire State manufacturing, industrial production and preliminary UoM consumer sentiment all took their toll on the markets this afternoon.
It seems that investors have a threshold for how much negative US news they are willing to tolerate before the fuel such weak data gives to a dovish Fed outlook is outweighed, with Friday’s figures stretching investors’ resolve slightly too far. This left the Dow flat with the dollar once again stranded after originally spending most of the day taking back its losses against the euro and the pound.
Given its recent behaviour it was perhaps too much to ask for the Eurozone to have a consistent, big-swing-less, end to the week. The region punished those with such lofty expectations this afternoon, with the DAX seeing its latest 3 digit declines after that flurry of weak data from the US. With the bond market steady and little news from Greece, the region’s violent reaction to the mere chance of its currency growing on the back of bad news from the US shows just how unstable the Eurozone has become.
Where the Eurozone goes the FTSE follows, and as the DAX led the latest region-wide declines, the UK index suffered in its wake. Things were made worse by widening losses for Brent Crude, which fell just below $66 per barrel; this exacerbated the oil sector’s day-long declines whilst helping to infect the mining sector, which had originally been in the green throughout the morning.
There was some good news on the markets; reports that GVC Holdings has bid for Bwin.Party Digital Entertainment sent the latter’s shares flying, gaining around 10% to trade near the £1 mark. Interestingly according to market value, Bwin is worth about double that of GVC; unsurprisingly then, the news of such a bid dragged GVC slightly into the red as the week came to a close.
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