Gains slip away as investors fret about earnings
|Stocks have dropped once again, as risk appetite evaporates following Microsoft’s earnings yesterday, says Chris Beauchamp, chief market analyst at online trading platform IG.
Stocks tumble across the board
“The FTSE 100 is just one of a swathe of indices in the red in Europe and the US this afternoon. For the UK’s main index, the past week has been one of losses overall, which is perhaps not surprising following the recent four-year high. Trading statements from UK plc this week have been ‘OK’, but not of the kind to really fire up enthusiasm in investors to chase the index at its current levels. For the FTSE 250, JD Wetherspoon’s numbers point towards the problem of investing in the UK economy at present – inflation is entrenched and consumer spending is constrained, which is hardly the kind of backdrop to tempt in fresh money to UK stocks.”
US reverses course
“Microsoft’s earnings have provided another reason for caution, especially given that companies continues to make headlines with news of layoffs. Markets are now hoping that the Fed’s hiking cycle is just 50 or even 25bps away, but while that relieve some pressure it is unlikely to transform the outlook. Once the Fed is done raising rates the game shifts to worrying about a weakening of data – to get to the sunlight uplands of loose policy, we first have to go through the dark valley of a recession.”
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.