The new week kicked off in positive fashion with UK and European stocks rising on Monday, helping the German DAX rise back through 10,000 for the first time since mid-January.
Asian markets looked through another batch of weak Chinese economic data, instead taking a glass-half-full attitude and focusing on surprisingly strong Japanese machine orders. Orders jumped 15% m/m in January, much higher than the 1.9% expected.
Today’s stock market gains remain vulnerable with oil prices lower but the rising belief, supported by the IEA that a bottom could be in place is supporting sentiment. There is some evidence of a hedged belief in higher stock prices with the price of gold also rising.
Mining stocks were atop the FTSE 100, brushing past week data from China as the Chinese yuan remains near its strongest against the dollar this year. Insurers were near the bottom on the UK index ahead of Wednesday’s UK budget that could see another rise in insurance premium tax. UK banks were giving back some of last week’s ECB-induced gains as the sector complains that the bank levy is weighing harder than expected. Multi-nationals in general are at risk of Mr Osborne closing tax loopholes and reducing tax relief.
US stocks look set for a slightly weaker start after finishing last week strongly. There is little in the way of economic data until Tuesday’s release of US retail sales. The focus may remain on the Republican presidential race, with Tuesday, when primaries become winner take all, a major fork in the road.
USA pre-opening levels
S&P 500: 6 points lower at 2,016
Dow Jones: 47 points lower at 17,166
Nasdaq 100: 13 points lower at 4,348
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