Yesterday was a mixed session in the US, as the Nasdaq 100 and Nasdaq composite indices lost 0.5% while the Dow Jones and the S&P 500 made modest gains.
It was a similar story in Europe, with the Euro Stoxx 50 falling by 0.3% while the Spanish IBEX was up by 0.4%, though there were more losers than winners among the top flight of European equity indices on Monday. Markets are essentially marking time ahead of the US Federal Open Market Committee (FOMC) meeting, which begins today, with the US central bank deciding whether to cut interest rates, and by how much, on Wednesday.
At a sector level in the US, the financial and energy groupings were up by 1.22% and 1.2% respectively while information technology fell by 0.9%. The percentage of S&P 500 energy stocks trading above their five-day moving average rebounded strongly to 86.36%. WTI crude has rallied by 7.47% over the last week and Brent by 5.71%.
Stocks that caught the eye yesterday included Intel, which rallied by 6.36% in the regular session before adding another 7.89% after hours. Those gains were made as the company announced a restructuring plan, which included spinning out its foundry business and opening it up to outside investment, alongside new contracts from the US Department of Defence and a wider collaboration with Amazon Web Services. To some extent, this still feels like tinkering around the edges, and the Intel stock price remains down by more than 50% over the last six months.
Bath and Body Works was another big mover yesterday, adding 6.25% in the session. There was no obvious news to cause such a rise, but there is a reasonably sized short position in the stock, which could be the subject of a squeeze. The company announced last week that it would look to hire up to 30,000 temporary staff for the upcoming holiday season, which sounds like a vote of confidence.
In Europe, Vinci was the biggest gainer in the Euro Stoxx 50, up by 1.3%. Media group Vivendi was close behind and Spanish utility Iberdrola added 0.9%. Gold is flat in early European trade, though it is up by 2.65% on the week. However, copper is up by 0.54% today, and by 4.56% over the last week, after miner BHP warned that the demand for data centres and data centre construction could create a supply vacuum.
The highlight on the economic calendar today is US retail sales at 1.30pm (UK time), which is accompanied by inflation data out of Canada, and the ZEW economic sentiment indices for the EU and Germany. The ZEW data from Germany last time out wasn’t encouraging, so this could be worth watching.
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