"While we might not be at the end of the correction in US markets, it looks like a fresh one has started in Europe, where heavy losses predominate across stock markets as the week winds down.”

Wall Street steady after a tough month

Trading in the US this afternoon has been characterised by a series of dramatic, short-term swings that illustrate perfectly the tussle going on between buyers and sellers. It looks like neither side has the strength to prevail at present, and both have valid reasons for their views. The latter is reinforced by the hawkish Fed that emerged on Wednesday during the post-meeting press conference, while the latter is buttressed by the tempting bargains on offer among indices and stocks that have fallen sharply so far this month.”

Europe takes its turn to fall sharply

“Earlier in the week European markets seemed broadly immune to the losses in the US but that is changing as the Dax and FTSE 100 both fall sharply. This sign of broadening selling does not bode well for those that hope a bounce can develop once January is out of the way, and suggests that concerns about inflation and rising rates will hit the European financial markets once more. A shift in ECB rhetoric next week could put further pressure on continental European stocks.”

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.

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