Stock Market Trading: 15 August 2014
European stocks are set to edge higher on the open as yesterday's momentum keeps pumping.
When it comes to news, at least economic, bad news has resumed it good connotations.
Fears of a European recession and deflationary slump have been welcomed by markets now that the case for quantitative easing looks irrepressible.
Investors also seemed to take Russian President Vladimir Putin's address in the Crimea as a sign of a de-escalation of tensions with Ukraine.
Whilst spread betting
markets pounced on the reconciliatory aspect which suggested that he didn't want war or confrontation, they also ignored the conditional part that said the armed forces were still within their arsenal of options.
Considering that overnight reports have suggested that Russian military vehicles, not the aid convoy, have rumbled across the border into Ukraine, we will have to see how committed Putin is to his earlier statement.
Either way, US equities continued to rally after the speech, with the Dow Jones
gaining 0.4% to reach a 2 week high of 16,730.
Stock Market Trading: 14 August 2014
A weak retail sales figure saw the Dow Jones trade through its 2 week high yesterday, with the index now trading at 16,225.
US stocks rose as traders speculated that the slowdown in purchasing would delay Janet Yellen's thoughts about raising rates sooner than anticipated.
Despite the strong close overnight, European equities are set to open flat this morning ahead of GDP data and geopolitical risk events.
Whilst Mario Draghi has suggested that the Eurozone recovery remains on track, today's growth figures from the EU and, perhaps more importantly, Germany may throw that statement into disarray.
Nobody is expecting a slump on the scale of Italy's Q2 GDP last week, but even a marginally weak number will cause markets to question Draghi's accuracy.
Traders will also be kept on their toes by any news about the Russian convoy.
Just as various news companies ran differing stories about what Kiev and the Kremlin had agreed, the lack of confirmed reports has led to disagreement about the convoy's current whereabouts.
Some media outlets are suggesting that it is holed up on the border, whilst rumours are swirling that it is heading towards pro-Russian territory to cross there and bypass the Ukrainian authorities.
The problem is that everything remains completely unverified and this is certainly adding to the cautious start.
Stock Market Trading: 13 August 2014
European equities are set to edge higher on the open as concerns over the Russian aid convoy die down.
would also be up on the open this morning but a large number of companies are going ex-dividend, shaving 22 points off the index.
Initial concerns that the Russian aid convoy was just a Trojan horse move by the Kremlin have eased now that authorities in Kiev have come around to the idea of receiving the supplies.
However, there's a lot of confusion to exactly what Kiev has agreed to.
Some media outlets are reporting that the supplies must be handed over to the International Committee of the Red Cross at the border for them to distribute, whilst other sources are suggesting that the whole convoy will be allowed in as long as it is accompanied by the Red Cross.
Whilst this may seem like a minor administrative point, Andriy Lysenko, spokesman for the Ukrainian National Security and Defence Council, has said that the convoy won't be allowed on Ukrainian territory.
As a result, traders are a little nervous about what will happen if the Ukrainian border guards butt heads with the Russian convoy, and whether any incident could be used as the pre-text for something much bigger.
The Dow has yet to find a direction this week, opting to trade in a tight range instead.
We have seen some solid US data of late, including a 13 year high in job openings, and are expecting a positive retail sales number today.
As such, sentiment seems set to favour the bulls, who remain quietly confident about further gains but will have one eye on the geopolitical hotspots.
Stock Market Trading: 12 August 2014
are set to ease modestly on the open as the current geopolitical soap opera throws out another twist.
There were some solid gains for European indices yesterday as an apparent easing of Russian military build up on the Ukrainian border was seen as the green light for bargain hunters to make an appearance.
However, post the close, NATO came out with a contradictory statement suggesting that a Russian invasion was a high probability.
Reports from Russia Today have said that a 'humanitarian' convoy has departed from Alabino, Russia, en-route to Ukraine, but markets are keen to find out what Putin's definition of 'humanitarian' is.
Traders are afraid that something has gotten lost in translation and remember only too clearly how much the 'peace keeping' force that went into Georgia in 2008 resembled an invading army.
Whilst there was a belief that things were quietening down in the Middle East, the bulls didn't manage to add too much yesterday, with the Wall Street index still trading around 16,580.
After the rally from late last week, investors will be looking for specific data releases or news items to boost sentiment in the markets.
Stock Market Trading: 11 August 2014
European indices are set to rally sharply as one of the geopolitical flash points eases.
Whilst the West has engaged ISIS in northern Iraq, and Obama has said that this will not be solved in a matter of weeks, the heat from the Ukraine/Russia situation seems to be dying down.
Russia seems to have re-used the old chestnut of 'ending military manoeuvres' to tone down the tension and markets are breathing a sigh of relief.
The news saw US stocks stage an impressive rally on Friday and overnight gains in Asia are pointing to a firmer start this morning.
The large move in the Nikkei
was also helped by reports that Japan's pension fund has removed caps on domestic equity ownership.