ETX Capital Daily Market Bite, 8th July, 2013; Stocks Post Modest Gain On US Jobs Data Cheer
July 8, 2013 8:17 am
July 8th, 2013, Daily Market Bite from Ishaq Siddiqi Market Strategist
Stocks in Europe jumped higher at the start of Monday’s session, propelled by Wall Street’s late advance on Friday as investors digested the solid US monthly jobs report. Reaction to the report was dramatic; stocks on both sides of the Atlantic rose after the payrolls release only to slide as the figure reignited fears that the Federal Reserve now have reason to start tapering stimulus sooner than the market has braced itself for.
Equities in Europe closed lower on Friday but equities in the US rallied into the close as market participants soon deemed the outcome as an indicator of a stronger US economic recovery than previously thought. At the same time, last Thursday’s dovish policy meetings from the BOE and ECB kept investors feeling comfortable on the whole about the prospects of global loose monetary policy.
Asian markets were weaker overnight as investors assessed the implications of a stronger US recovery/Fed tapering scenario on the region. Asian markets have benefited considerable on easy Fed cash over the years but with that soon coming to an end, investors are fast trimming their exposure to Asia and emerging markets in favour for more growth-focused investments such as US equities.
Closer to home, the political situation in Portugal has eased since last week’s high profile resignations by two top ministers which left investors fearing the government there will soon implode. Since, the PM has managed to speak to coalition partners in a bid to avert a political crisis, rebuilding the government, helping bond yields to push off from dangerous highs. Attention today turns to a meeting of eurogroup finance ministers who will be discussing progress on Greece’s next aid funds together with the conditions attached to it.
Data is rather light with only German industrial orders and the euro zone Sentix reports both due for release; Of course the big show stealers this week will be the first giants to start the US earnings season; Alcoa kicks it off after the market close, while JPMorgan Chase and Wells Fargo report numbers later in the week.
July 8th, 2013, Daily Market Bite from Ishaq Siddiqi Market Strategist
Stocks in Europe jumped higher at the start of Monday’s session, propelled by Wall Street’s late advance on Friday as investors digested the solid US monthly jobs report. Reaction to the report was dramatic; stocks on both sides of the Atlantic rose after the payrolls release only to slide as the figure reignited fears that the Federal Reserve now have reason to start tapering stimulus sooner than the market has braced itself for.
Equities in Europe closed lower on Friday but equities in the US rallied into the close as market participants soon deemed the outcome as an indicator of a stronger US economic recovery than previously thought. At the same time, last Thursday’s dovish policy meetings from the BOE and ECB kept investors feeling comfortable on the whole about the prospects of global loose monetary policy.
Asian markets were weaker overnight as investors assessed the implications of a stronger US recovery/Fed tapering scenario on the region. Asian markets have benefited considerable on easy Fed cash over the years but with that soon coming to an end, investors are fast trimming their exposure to Asia and emerging markets in favour for more growth-focused investments such as US equities.
Closer to home, the political situation in Portugal has eased since last week’s high profile resignations by two top ministers which left investors fearing the government there will soon implode. Since, the PM has managed to speak to coalition partners in a bid to avert a political crisis, rebuilding the government, helping bond yields to push off from dangerous highs. Attention today turns to a meeting of eurogroup finance ministers who will be discussing progress on Greece’s next aid funds together with the conditions attached to it.
Data is rather light with only German industrial orders and the euro zone Sentix reports both due for release; Of course the big show stealers this week will be the first giants to start the US earnings season; Alcoa kicks it off after the market close, while JPMorgan Chase and Wells Fargo report numbers later in the week.
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