Healthy gains across european markets
|The FTSE 100 is enjoying a welcome triple-digit gain, as European stocks move higher and outpace their US cousins.
- Good US data solidifies economic rebound narrative
- Indices in Europe make impressive headway
- Cyclical stocks power FTSE 100
While ADP numbers fell short of some of the loftier expectations today, a 742,000 increase in job numbers is welcome news, and when coupled with strong Markit and ISM services PMI readings it is clear that the world’s largest economy is well on the way to a recovery. After yesterday’s bout of wobbles over potential rate rises US stocks are much calmer, but are being left far behind by a rallying European equities complex, pointing to a greater willingness among investors to put money to work in European stocks rather than in their US brethren. The latter continue to struggle to find the catalyst for more upside, having essentially priced in all the good news for the time being. It is to be hoped that Europe is going to see economic data of similar strength later in the year once its vaccination programme, now finally moving into a higher gear, has borne fruit, and as a result investors see more upside on this side of the Atlantic rather than over on Wall Street.
The cyclical recovery play is in fine form on the FTSE 100, with miners, banks and housebuilders on the up and Ocado, the sole real tech/growth firm in the index, dropping sharply. After a struggle in March and April the UK’s headline index is back at the highs for the year, and seemingly-determined to keep going. It has made sense to keep faith with the FTSE 100 in recent months, buying the dips in a way that would have been a very bad idea in the summer, when growth stocks were all the rage. Further strong data from the US and elsewhere should mean the cyclical stocks that are today’s winners will keep moving higher in the long-term.
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