Spreadex Market Update
Strong open for Dow Jones ensure European gains remain, US index still on track for weak week
Jumping around 130 point, and crossing the 17500 mark in the process, the Dow Jones is still on track for one of its worst weeks (and months) in a while. Monday and Tuesday saw the index pushing 17800 thanks to the Goldman Sachs-inspired surge from Brent Crude. Yet since then the Dow has suffered, with first the best US inflation figure since February 2013, and then that surprisingly hawkish set of Fed meeting minutes from April, spooking the index’s rate-hike adverse investors.
It will be interesting to see where the Dow is this time next week. By then the second estimate Q1 GDP reading will have been released, and without any upwards revisions to that woeful 0.5% (at the annualised rate) the central bank’s hawks may find their cause undermined by the seriously weak US growth, something that could work in the Dow’s favour.
Over in Europe the indices held onto their gains like gangbusters, the FTSE and DAX rising 1.4% and 0.9% respectively. For both regions it’s been a choppy week, following the same oil-optimistic/US rate-hike pessimistic trajectory as the Dow Jones. Next week may see a slight separation in fortunes, as the Eurozone releases a wave of manufacturing and services PMIs and the UK reveals its second estimate first quarter GDP figure.
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