“US traders continue to fret about what the Fed might say tomorrow, and have continued to drive indices on Wall Street lower, reversing much of yesterday’s astonishing rebound.”

Wall Street stumbles again but Europe steadier

“A poor performance for January seems all but guaranteed as we head towards tomorrow’s FOMC decision. Despite Monday’s remarkable bounce from the lows the selling in the US has restarted, driving the Dow back below 34,000 for a time. It is still the fear of what the Fed might say tomorrow that is driving US stocks lower, with European markets much more blasé about the whole thing. This is a bit odd however – if Powell and co really bring their hawkish game to tomorrow’s meeting and risk does sell off again European markets will not be untouched, and today’s relative calm will look awfully misplaced.”

FTSE 100 edges higher

“Despite some wobbles throughout the day the FTSE 100 has managed to hold on to most of yesterday’s rebound. Signs of a recovery in metals and oil have boosted the relevant sectors in the index, while higher yields have done their bit to lift bank stocks once again. It is far too early to say if this European outperformance versus the US is here to stay – we have had plenty of false dawns in recent years – but if the shift away from tech and other growth names really gets going a different market environment could be upon us, one where US outperformance is not a given.”

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