The FTSE 100 is 26 points lower in mid-morning trading, hurry by a drop in mining stocks, but equities are a little brighter despite yesterday’s losses in the US.
Tentative signs of a recovery are in evidence across equities in Europe, while US futures have begun to look more encouraging after yet another heavy day of losses. The only question is whether a rebound will begin ahead of the Fed decision tomorrow, or whether another quick flush is due before tomorrow’s widely-expected rate hike. Looking back at the history of equities in the wake of each hike since the end of 2015, the near-term picture is not pretty, with most increases followed by either sideways trading or a swift drop. Although last December’s rate hike was followed by the usual Santa rally, the cheery feeling was followed by January’s stomach-churning sell-off. Dip buyers might have a last hurrah in 2018, but beyond that the outlook is not encouraging.
Concerns about Chinese growth continue to hit FTSE-listed miners, with sentiment hit hard after President Xi failed to unveil any new initiatives to get growth moving again. Mercifully, he did not mention trade wars either, which is at least better than a tub-thumping exercise in rhetoric. Those hoping to leave trade wars behind in 2018, however, are likely to be disappointed.
Ahead of the open, we expect the Dow to start at 23,744, up 152 points on last night’s close.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Recommended Content
Editors’ Picks
AUD/USD remained bid above 0.6500
AUD/USD extended further its bullish performance, advancing for the fourth session in a row on Thursday, although a sustainable breakout of the key 200-day SMA at 0.6526 still remain elusive.
EUR/USD faces a minor resistance near at 1.0750
EUR/USD quickly left behind Wednesday’s small downtick and resumed its uptrend north of 1.0700 the figure, always on the back of the persistent sell-off in the US Dollar ahead of key PCE data on Friday.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: slower growth with stronger inflation
The dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.