US markets have lagged behind Europe today, with the Dow up just 0.1% this afternoon compared to solid gains for the FTSE 100 and the Dax.
- Caution persists ahead of Netflix earnings
- But Europe puts on a better show
- Galliford Try slumps on warning
US indices have retreated from the highs set by the futures before the open, but the market is still up on the day for the time being. Investors are now, it seems, bored of US bank earnings and are keen to see what Netflix has to offer, with earnings from the streaming giant likely to spark greater volatility than those from Bank of America. There has been plenty of volatility below the surface, where UnitedHealth’s earnings saw the stock drop back sharply after the open, robbing the Dow of most of its gains, as policy uncertainty saw investors take the chance to exit the stock and run. European markets are more robust however, with the Dax at new highs for the year and the FTSE 100 making
another try at breaking higher after circling beneath key resistance for a number of sessions. With short positions on European stocks once again the ‘most crowded trade’ among fund managers there is a growing sense that we could be on the cusp of some better times for the long-suffering European equity market.
The London market continues to be ruthlessly intolerant of profit warnings, as shown by Galliford Try. If the firm ditched its infrastructure arm and focused on housebuilding alone, it might do better, since the record over the past year for the division has been grim indeed. This underperforming business will continue to weigh on the shares and risks leaving the firm far behind in any sustained recovery in housebuilder shares.
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