Powell testimony driving stock volatility
|European markets have closed in the red yet again, yet with Powell’s testimony providing volatility for the US session, markets are trying to ascertain whether he will provide a somewhat more neutral tone this time around
- European stocks slide once again
- WPP tumbles after weak 2018 guidance
- Powell sets out more neutral tone
European stocks are sliding again, as continued fears over a high interest rate environment continue to plague market sentiment. The start of a new month has done little to ease the global stock slide, with the FTSE looking likely to close out a third consecutive negative close. The biggest single drag on the FTSE 100 came in the form of a circa 10% slide for WPP, as the world’s biggest advertising agency warned investors that a flat 2017 is likely to be followed by another year devoid of growth. With WPP warning investors twice in 2017 over floundering sales, today’s shock come more in response to this year’s outlook rather than the 2017 figures.
While today has seen a host of big economic releases, it is Fed chair Jerome Powell who will likely prove the main driver of late price action today. Following an appearance that was widely perceived as a hawkish stance, we are seeing US stocks rise in response to a softer stance at today’s Senate testimony. Crucially, while Powell sees fiscal policies raising inflation in time, he sees little reason to believe that we are currently seeing an overheating in wages or economic growth.
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