Spreadex Market Analysis: European Equity Benchmarks Trade In The Red

AM Analysis – “US stocks erased gains last night” – Lee Mumford
US stocks erased gains last night with the S&P ending lower following Carl Icahn’s cautious comments on the equities markets. Icahn, speaking at the Reuters Global Investment Outlook Summit, said he is “very cautious” on the stock market and feels a “big drop” is likely as earnings at many companies are fuelled by low borrowing costs rather than management expertise.

Despite the comments from Icahn, Asian shares edged to a two-week high overnight, adding to the previous days hefty gains as investors continue to gain confidence following China’s economic reform plans.

The US dollar continued to fall for a second day versus the yen on speculation the Federal Reserve will reiterate that economic growth isn’t yet sufficient to trim stimulus. Gold extends declines as investors cut demand for the metal amid a rally in equities whilst Crude was in decline following US taper talk and a decline in crude stockpiles after eight weeks of increases.

PM Analysis – “European equity benchmarks continue to trade in the red” – David White
European equity benchmarks continue to trade in the red amidst what has become a period of light consolidation ahead of the Fed minutes tomorrow evening. Investors are once again faced with the prospect of tapering news flow, which, so far, has allowed for buying opportunities from market participants unhappy to own risk over the scheduled announcement. The DJIA, however, trades close to all-time highs of 16,000 that were reached during yesterday’s session.

Elsewhere, Bitcoin has captivated financial markets again, as its ascent to over £500 today has investors considering it as a viable alternative to fiat currencies like never before. The senate hearing yesterday has acted to compound its popularity.

As one of the only brokers to offer a cash-settled Bitcoin product to clients, we’ve seen very significant demand. Seeing the price more than double in periods of heightened volatility has traders looking to participate in violent swings. Just today, for example, the price has almost halved from its high, making the prospect of being able to short Bitcoin just as attractive to day traders as being long.

[The original articles by Spreadex can be found here.]

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