Expectations that the Fed would push ahead with a tapering of bond purchases this year.
- The headline US jobs report was again much weaker than expected with a 194,000 increase in payrolls, although underlying components were stronger. There were still expectations that the Fed would push ahead with a tapering of bond purchases this year.
- US bond yields registered a significant net increase to 4-month highs. Overall risk appetite was still cautious amid increased inflation concerns.
- Wall Street equities edged lower while Asian bourses were mixed. The dollar initially dipped lower before regaining ground as higher yields provided support.
- Oil prices surged again with WTI at fresh 6-year highs amid expectations of tight supplies. Precious metals jumped after the US jobs data before surrendering gains with limited net losses for gold.
- Euro-zone equities edged lower on Friday with significant divergence across sectors as a tech-sector retreat offset gains in oil. There were further underlying reservations over the implications of high energy prices.
- The German DAX index declined 0.3% with a 0.6% retreat for the Eurostoxx 50 index.
- Major UK stocks were able to post net gains on Friday with support from gains in the oil sector, but there were further reservations over the implications of high energy costs and threat of monetary policy tightening with FTSE 100 index gains held to 0.25%.
- There was a mixed reaction to the latest US jobs data with net losses on Wall Street as higher bond yields sapped confidence with markets also uneasy over underlying inflation pressures. Overall sentiment held firm with a 0.2% retreat for the S&P 500 index.
- There were mixed trends in Asia. Japan’s Nikkei 225 index gained 1.6% as the yen dipped sharply while the Australian ASX index retreated 0.3%.
- China’s Shanghai index traded 0.1% higher in late trading with a 1.6% gain for Hong Kong’s Hang Seng index.
Stock to watch today
Wood Group Plc sparked into life on Friday after yet again finding support around the 198 – 200p level. This is the 4th time support has been found in this region since October 2020. The hammer candle that formed at support on the 20th September 2021 has triggered fresh buying. After a mini consolidation, prices have pushed impulsively through resistance at 235p and should now continue higher in the short to medium term.
CCM Opinion: BUY
Buy between 232 – 242p
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