Spreadex Market Update
US GDP figures healthy, Dow Jones slips into the red
Whilst lower than expected, annualised growth of 2.3% is still healthy, especially when the huge upward revision for the first quarter figure, from a 0.2% contraction to a 0.6% expansion, is factored in.
And though consumer spending was once again the biggest GDP driver AND the fact that US growth was a 2%, not the reported 2.3%, for the years between 2011 and 2014, these figures don’t add any fresh kinks to the path leading towards a September rate-hike, especially when another solid jobless claims number is taken into consideration. Combine all this with yesterday’s hawkish (or as hawkish as the Fed gets at the moment) statement, and the Dow Jones slid into the red after the open, with the dollar surging against a basket of currencies.
The FTSE had to give up some of its gains this afternoon, as widening losses for copper weighed on the mining sector. However, the UK index is still on track for a third day of solid growth, with Shell up nearly 5% and AstraZeneca similarly robust. Tomorrow might be a different story; whilst Lloyds and BG are still to report, Friday doesn’t have the same earnings-calibre as Wednesday and Thursday, leaving the FTSE more vulnerable to any negative movements in the commodity sector.
The DAX and the CAC lost most of their lustre this Thursday afternoon, with investors finding little reason to carry their lunchtime gains through until the end of the day. The latest troubles for Alexis Tsipras within his own party appear unresolved, with either an internal vote on the bailout this weekend or a Syriza congress in September on the cards as the Greek PM tries to quell the rebellious attitudes of some of his MPs. Add on top of this the news that the IMF is considering not participating in a third bailout, and it looks like there is still plenty of juice left in the ol’ Grexit machine.
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