Investors are watching the budget talks in Washington closely, while there are more signs that consumers are reining in their spending says Chris Beauchamp, Chief Market Analyst at online trading platform IG.
Stocks struggle thanks to debt and spending worries
It’s too early to say that the rally from April’s lows has run its course, but the going continues to get tougher for stocks. The US budget continues to dominate newsflow, but it takes place in a market atmosphere that’s now much less forgiving of Washington’s propensity to spend, spend, spend without regard for the consequences. To add to that, the economy that supports the whole tottering edifice continues to give cause for concern; Target has reduced its annual forecast as spending comes under pressure. Stocks have shown a remarkable ability to recover from bad news, but investors cannot take it for granted right now.
Oil prices trim gains
Brent and WTI have eased back from their overnight highs but worries about an Israeli strike on Iran could easily send them flying once again. Without a comprehensive deal to restrain Tehran’s nuclear programme, Tel Aviv may feel it has run out of road and needs to act now. Such a move would prompt a much bigger move higher in oil than that seen yesterday.
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