USA30, H1
European stock markets are broadly higher, as are US futures. Asian markets closed mixed, after getting a late bid. China’s tech sector was once again hit hard by the country’s regulatory clampdown amid a report that officials want to break up Ant Group Co’s Alipay. Online platforms have also been told to protect the rights of workers. The Hang Seng was most hit by the reports and closed off lows, but still down -1.5%, while the CSI 300 was down -0.4% by end of trade. Nikkei and ASX meanwhile managed to erase early losses and were up 0.2% in the end, and sentiment improved further during the course of the European session. There were no data releases and markets continue to speculate on additional tapering announcements next week, although the ECB’s example of wrapping a slight reduction in purchases in a dovish guidance on rates may have helped to ease concern over central bank policies and reassured investors that policy will remain accommodative for some time to come. Fedspeak has halted as we start the blackout period before next week’s FOMC 2-day meeting.
GER30 and UK100 are currently up 0.9% (15,766)and 0.7% (7,078) respectively, US futures are up 0.5-0.6%. Last week the USA500 lost 1.7%, closing below the key 21-day moving average for the first time in 16 days, and had four consecutive losing days for the first time since February. Is this an indication of more weakness to come as we are now in the volatile and traditionally weak September or another chance for Bulls to “buy the dip”? Ultimately, only time will tell, however with the big 6 of the USA500 (APPL, AMZN, MSFT, FB, GOOG & TSLA) all suffering declines, with Apple topping them all off (-3.85%) following the mixed ruling in the antitrust case with EPIC games, the technology sector had a particularly weak week.
The USA30 is up about 200 points at 34,775 after printing five straight days of losses. Economic re-openings and tech issues are leading in pre-market trade so far today. Inflation concerns, largely driven by supply chain bottlenecks, should contain market exuberance ahead of Tuesday’s August CPI report, which is expected to show a month on month increase of 0.4% (down from 0.5% last time) for the headline number and for the more important CORE figure to remain stable at 0.3%. Recall Friday’s PPI print was hotter than expected at 0.7%.
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Stuart Cowell
Head Market Analyst
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