Stock Market Trading: 01 August 2014
European equities are set to continue their slide as yesterday's painful session has given traders a hangover.
A multitude of negative cues from Russia, weak economic and corporate data, the Fed and even Argentina all conspired to strip away any reason to hold risky assets.
Although spread trading
markets are set to open lower this morning, there may be a brief pause in the carnage ahead of the US jobs data, but it's likely to be an anxious wait.
The 'worst' case scenario that is getting the bulls trembling is a repeat of last month's strong data releases.
If we see another sharp drop in the unemployment rate and another forecast smashing payrolls figure then there can be no doubting the upward trajectory of the US economy.
Unfortunately for the bulls, this will only solidify the speculation that monetary tightening is on its way sooner rather than later.
Stock Market Trading: 31 July 2014
Flat starts are expected for European markets, showing similar indecisiveness to US and Asian markets.
There's a huge amount of uncertainty stalking sentiment at the moment, what with the situation in Ukraine still being so fluid as well as the natural caution ahead of tomorrow's US jobs data
There were few surprises from the Fed last night, tapering by $10 billion for the sixth time and staying on course to end asset purchases in October.
At the same time, US GDP surpassed expectations by coming in at 4%.
However, good news has once again become bad news, as the positive economic numbers made traders nervous that the beginning of monetary tightening is only around the corner.
Stock Market Trading: 30 July 2014
European equities are set to open lower this morning as the details of yesterday's US and EU sanctions against Russia weigh on sentiment.
US stocks had soared in the early part of the session on the back of consumer confidence rising to 90.9, the highest reading since October 2007.
However, geopolitical risk took centre stage as President Obama appeared to adopt a tougher tone by revealing fresh sanctions.
Whilst Europe initially seemed quite nonchalant, managing to close the session with decent gains, US markets had longer to think about the fallout of such moves and reversed course.
As a result, the Dow Jones
ended deep in the red, losing 61 points to 16,918.5.
Prior to the announcement of the sanctions, Russian Foreign Minister Sergey Lavrov was dismissive of the potential impact on Russia, suggesting that they wouldn't resort to tit-for-tat retaliation.
However, wary uncertainty has now descended on the markets over what Putin's reaction will be.
There has yet to be any official response and the silence is akin to watching/waiting for your opponent make a move in chess.
Stock Market Trading: 29 July 2014
Some healthy corporate earnings results kept US markets fairly optimistic yesterday ahead of Friday's key nonfarm payrolls
Low interest rates are fuelling plenty of mergers and acquisitions activity, giving investors another reason to be cheerful.
This saw the Dow Jones resume its climb, with the index gaining 23 points to 16,982 after an initial sell off in early afternoon trading.
The rebound in the US and some overnight gains in Asia are set to see European shares edge higher on the open this morning.
Despite the positive start, markets aren't expected to make much headway as traders sit on the sidelines ahead of today's meeting of European Union ambassadors.
Last week's meeting of European foreign ministers was widely criticised for being impotent, unable to coble together anything that would actually impact Russia.
Nevertheless, the door was left ajar for serious tier 3 economic sanctions and it appears that world leaders have been busy on the diplomatic back channels agreeing tough financial, energy and military action in unison with the US.
However, like the prior tit-for-tat exchange of token sanctions between the West and Russia, traders are concerned about how Russia will react and what they will deem to be appropriate retaliatory action.
The information and comments provided herein under no circumstances are to be considered an offer or solicitation to invest and nothing herein should be construed as investment advice. The information provided is believed to be accurate at the date the information is produced.
By Jonathan Sudaria, 1 August 2014