US stocks to open lower
The shaky initial reaction to the much stronger than expected US payrolls has continued with mixed progress for equities on Monday. The EM-focus amongst top flight UK stocks is helping the FTSE 100
edge out small gains but European benchmarks are all lower.
The raised prospect of a US rate-rise in December has so far affected the internals of the major averages more than the overall direction. Financials including UK banks Barclays and HSBC are rallying as investors expect better lending margins once rates rise. Property companies such as Intu and utilities like Severn Trent are sinking since higher rates will increase the cost of purchasing a mortgage and the cost of servicing high levels of corporate debt will rise.
The surprisingly stable reaction in Asian markets to the idea of a US rate-rise brought on by the strong jobs report has helped Asian-focused Aberdeen Asset Management and Standard Chartered top the FTSE 100. Mining companies are also amongst some of the top risers. Chinese regulators announcing a resumption of IPOs appears to have outweighed concerns over a US rate hike. The strong dollar has weakened the Japanese yen in a boost to the exporters listed on the country’s benchmark Nikkei stock index. Nobody wanted to touch stocks exposed to emerging markets heading into Friday’s NFP, so with Asian markets holding up post-report, traders are piling back in.
US stocks look set for a weaker start on Friday. With a 2015 rate hike now looking more likely than not and after six straight weeks of gains for the Dow Jones and S&P 500, there’s a lot to be said for taking some profits off the table. The relatively calm initial reaction to the strong jobs report suggests the uptrend can remain intact but is just due a correction. There just needs to be enough confident dip-buyers to match those taking profits to stop a minor correction turning into another August-style rout.
USA pre-opening levels
S&P 500: 8 points lower at 2,091
Dow Jones: 71 points lower at 17,839
Nasdaq 100: 13 points lower at 4,694
CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
CMC Markets erbjuder sin tjänst som ”execution only”. Detta material (antingen uttryckt eller inte) är endast för allmän information och tar inte hänsyn till dina personliga omständigheter eller mål. Ingenting i detta material är (eller bör anses vara) finansiella, investeringar eller andra råd som beroende bör läggas på. Inget yttrande i materialet utgör en rekommendation från CMC Markets eller författaren om en viss investering, säkerhet, transaktion eller investeringsstrategi. Detta innehåll har inte skapats i enlighet med de regler som finns för oberoende investeringsrådgivning. Även om vi inte uttryckligen hindras från att handla innan vi har tillhandhållit detta innehåll försöker vi inte dra nytta av det innan det sprids.