Spreadex Market Update
Western indices hold onto robust gains, even as US GDP and VW news cause loss of session highs
An improvement on an already strong second quarter GDP figure, with the final number creeping up to 3.9% from the 3.7% initial reading, appeared to take the edge of the Dow Jones at the open, pushing it away from its 200 point rise to a still respectable 170+ point jump. The index’s reaction to the figure complicates an already tricky US market landscape; traditionally in 2015 such an upward revision would have caused much larger problems for the Dow. Instead, in either an example of the short-term memory of the market, or a nascent shift in investors’ opinions towards a US rate hike, the Dow Jones held onto its 3 digit gains, boosted by a near 9% surge for Nike that saw the sports mega-brand approach $125 per share for the first time in its history.
The European indices by and large underwent the same motions as the Dow did this afternoon. Whilst just below their session highs, the FTSE, CAC and DAX all maintained their impressive gains after the US open. The DAX saw the biggest slip from its lunchtime peak, falling to a 260 point gain from its 300 point high as Volkswagen lurched back into the red.
News that German light trucks, as well as cars, had been found using the defeat device, alongside reports implicating VW executives in the emissions test deceit, took their toll on the already batter and bruised stock, with growing losses for Porsche thrown in for good measure. It means that whoever takes over from Martin Winterkorn, with the front-runner being the current CEO of Porsche AG (not to be confused with the VW’s majority shareholder Porsche Automobil Holding SE) Mattias Mueller, has an unenviable task ahead of them.
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