Modest losses prevail in stocks
Some profit-taking in indices off the back of Friday’s bounce leaves the overall bullish short-term view intact.
Equities tiptoe lower
“Stocks on both sides of the Atlantic have drifted down at the start of the week, trimming some of their gains from the sharp move up on Friday. China’s poor data overnight caused a flutter of worry to echo around global bourses, but the PBoC rate cut has helped to steady things in the short-term. So far, this movement doesn’t look like it is about to turn into anything more severe, and the very absence of major news this week will likely prove more of a help than a hindrance to further gains.”
Commodities drop again
“A big component of the bounce since the July low has been the expectation that inflation readings will moderate thanks to the falls in oil and other commodities. Today’s fresh drops, caused in no small part by the China data, will help those arguing that last week’s US CPI was not a one-off. Oil’s fall owes more to hopes of a deal with Iran, but regardless of cause weaker commodity prices should help indices push higher, even with oil’s fall hitting energy names.”
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