Spreadex Market Update
Dow continues end of quarter party, but global outlook still weak going into Q4
Due to the homogenous nature of Wednesday’s trading it was hard to ascertain what effect the better than expected ADP non-farm figure, at 200k against the forecast 192k, and a weaker than predicted Chicago PMI, at 48.7 against 54.4 last month, had on the Dow. Perhaps this evening’s comments from Janet Yellen will provide more insight into what the US markets want at the moment; when the Fed chair suggested last week that a rate-hike will most likely occur in 2015 the American indices surged on the signs of some much-needed clarity. It will be interesting, then, to see if the markets have a similar reaction if Yellen drops any newsworthy nuggets of information into her speech in St Louis.
With the Dow continuing the end of quarter party, the European indices could maintain the muscular, if meaningless, growth that began this morning. The UK’s supermarket sector, buoyed by better-than-expected profit-promising comments from Sainsbury’s, only widened its gains as the day went on, whilst the commodity stocks (bar Vedanta Resources, which slipped after being placed on credit watch by Standard & Poor as the company tries to finalise its Cairn India merger) continued to rebound from Monday’s mayhem. This meant the FTSE could climb around 120 points, with the DAX and CAC posted their own QE-eying 3 digit growth.
So that’s effectively it for another quarter. Not that things will be radically different at the start of Q4; the timeline for a US rate-hike is still non-existent, Volkswagen is still only at the beginning of a long and costly scandal, and, most importantly, the Chinese economy is still stalling, more (unneeded) evidence of which will likely arrive tomorrow in the form of the country’s manufacturing PMIs.
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