Investors continue to retreat from equities, as higher yields and the prospect of ongoing high interest rates cause a resurgence of risk-off sentiment, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.
Stocks fall further
“The new week has picked up where the last one left off. Stocks have dropped further in trading today, as the Fed’s ‘higher for longer’ rhetoric continues to prompt a flight from risk. September’s reputation as one of the worst months for stocks will have been bolstered by the last four weeks of trading. A fresh climb in yields only adds to the stock market’s woes, as investors come to realise that when Powell says ‘higher for longer’, he really means it.”
FTSE 100 tests 7600
“Rising yields and a worsening economic outlook is a dangerous cocktail for the FTSE 100. Growth stocks like Ocado have been hard-hit as higher yields once again make stocks look less attractive, but normally-safer dividend players like Imperial Brands have come under pressure too as higher yields knock the shine off these stocks too.”
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
EUR/USD hits fresh three-month highs above 1.0970 as USD slides
EUR/USD rose above 1.0970, reaching the highest intraday level since August 11. The pair holds near the highs, supported by broad-based US Dollar weakness as market participants await comments from Federal Reserve officials and US housing data.
GBP/USD rises toward 1.2650 as DXY hits fresh monthly lows
GBP/USD rose from daily lows to 1.2648, the strongest level since early September on the back of a weaker US Dollar. The DXY trades near 103.00 at the lowest in almost three months ahead of comments from Fed officials.
Gold price extends its consolidative price moves amid a modest USD recovery
Gold price struggles to build on the overnight breakout momentum through a key barrier. A positive risk tone caps gains amid a modest recovery in the US bond yields and the USD.
Dogecoin price might recover losses if volume picks up
Dogecoin has noted a massive rise in wallet addresses with a non-zero balance. This increase is typical of rising demand among market participants for DOGE. On-chain metrics paint a bullish outlook for Dogecoin.
Eurozone bank lending continues to weaken as economy adjusts to higher rates
Loans to businesses are now 0.3% lower than in October last year, the first annual decline since July 2015. This confirms that monetary tightening is having a clear effect on the economy. A divide between countries is also opening up.