US markets edged up in early trading, while aside from a relatively-unchanged FTSE 100, European markets posted further losses. 

  • Stock markets still struggling 
  • Growth worries hit equities, but no sign of concern in oil prices
  • UK housebuilders edge back to flat after weak start

European markets remain in the red, as the sellers put up a stronger fight than they have done for quite some time. US stocks have begun the day in positive territory however, but the rebound is only tentative for the moment. 2021’s playbook suggests that we have another 48 hours or so of volatility to contend with, and then, if history is any guide, the bulls will wrest back control. So far it seems to be the usual concoction of worries about global growth (with a nod to the weaker China data this morning), plus an anxious eye on new Delta case numbers. In addition, of course, tapering concerns are still in the mix too, particularly following the UK CPI numbers this morning. These put fresh strength into sterling this morning, which once again moved up from $1.38 against the dollar. Also in focus this afternoon has been a remarkable spike in oil prices, which seem to be entirely unaffected by the growth worries that continue to afflict equity markets. Here too the inflation narrative will come back into play, with many worried that higher energy prices will choke off the recovery just as it looked to be gathering renewed strength. 

Oil prices and other rising commodity prices meant that BP, Shell and mining stocks were able to rise to the top of the FTSE 100 today, keeping that index close to unchanged on the day. Housebuilders dropped on the open today following Redrow’s earnings, but they have clawed back losses to end the day mostly unchanged as well. Redrow itself has solidly outpaced the sector of late, displaying strength where Persimmon and others have shown renewed weakness, an indication that investors are yet to be convinced overall that the sector offers good value. 

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