Spreadex Market Update
Rebalancing away from recent winners
Chatter in the equity market is currently firmly focused on a rebalancing away from recent winners, the so-called momentum stocks. Indeed, FTSE 100 winners such as EasyJet and Sports Direct have seen their share prices lose over 5 per cent in little over a few session, with little bad news to match notable. A similar theme has been occurring in the States, where small caps and recent winners have been shunned in favour of utilities. Investors have been voicing concerns that it is this sensitive part of the market that reacts to a withdrawal of risk appetite before anything else and therefore could be predictive of a potential broader sell-off in the equity market.
Meanwhile, major stock indices today have remained stable, as investors reallocate capital. The FTSE 100 trades unchanged at 6,845, with the Dax down 0.5 percent. Consumer confidence from the US unexpectedly fell earlier.
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