Dip buyers to the rescue
|Stock markets have recovered from yesterday’s tantrum, with the FTSE 100 30 points higher in mid-morning trading.
-
Stock bulls repair damage from Tuesday
-
Supermarkets face tougher times
-
Oil surges past $54 as Saudi Arabia weighs in
Risk appetite has staged another impressive recovery in the past 12 hours, reminding everyone that this is still a bull market. However, it is interesting that UK and European indices have been unable to hold on to all of their early gains, with the FTSE 100 unable to keep a hold on the 7400 level. The shortened week and an imminent earnings season means that neither the buyers nor the sellers are able to stamp their mark on this market. The big three supermarkets are all lower this morning, as the sector takes a knock following Tesco’s results. The weakness in UK wage highlighted by today’s UK employment data could also be playing a part here – with real wage growth in Britain now lower than inflation the supermarkets will struggle to boost margins through price increases, and with consumers perhaps beginning to shop around for bargains again a new price war looms. Just as things seemed to be improving for these firms, perhaps another tough period is on its way.
Saudi Arabia has dropped another hint about further production cuts, providing yet more strength to the currently unstoppable rally in crude. Riyadh is not the only OPEC member to think such cuts are needed, but it is the one whose view really counts, and thus we might see others fall into line in due course. It’s tough being bearish on crude, and it looks set to get a lot tougher, as US crude tops $54 for the first time in over a month. Ahead of the open, we expect the Dow to start at 20,677, up 26 points from last night’s close.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.