Wall Street stocks were hampered by renewed concerns over inflation pressures
Inflation concerns remained a key element in global markets, especially with strong upward pressure on costs in the PMI data.
There were further expectations that the Fed would have to tighten more quickly in response. US bond yields move higher on Tuesday, but there was a retreat on Wednesday.
Wall Street stocks were resilient with some relief over a late retreat in yields. Global equities overall were little changed with supply-side issues important.
The dollar maintained a strong tone on Fed expectations, but retreated slightly from 16-month highs. EUR/USD found some support at 16-month lows, but failed to make significant headway to trade just below 1.1250.
Sterling recovered from intra-day lows with a GBP/USD rebound from fresh 2021 lows below 1.3350 amid BoE tightening expectations.
Commodity currencies pared intra-day losses with a rebound in oil prices supporting the Canadian dollar. Oil prices strengthened with the release of strategic reserves seen as a token measure. Precious metals remained on the defensive, but recovered from intra-day lows.
Euro-zone equities failed to draw significant support from the Euro-zone data with concerns that the overall outlook was deteriorating amid coronavirus pressures. Wall Street stocks were also on the defensive which sapped support.
Major UK stocks were underpinned by gains in the energy sector with speculation over merger activity continuing to provide underlying support. There were reservations over the threat of higher interest rates, but the FTSE 100 index gained 0.15%
Wall Street stocks were hampered by renewed concerns over inflation pressures and the risk of a faster withdrawal of monetary stimulus. There was solid buying on dips with the S&P 500 index securing a net advance of 0.15%.
US futures were little changed on Wednesday and Asian bourses were again mixed with a generally cautious tone.
Japan’s Nikkei 225 index declined 1.6% after being closed on Tuesday with the Australian ASX index declining 0.15%.
China’s Shanghai index secured a 0.1% advance with Hong Kong’s Hang Seng index 0.4% higher in late trading amid a round of bargain hunting.
Stock to watch today
Babcock shares have found support around 311p and continue to trade in a bullish channel. Yesterday the shares broke out of a wedge pattern that has contained price since mid-September. Further upside looks possible from here back towards the recent highs.
CCM Opinion: BUY
Buy between 316 – 325p
The value of shares can fall as well as rise; you may not get back the amount you invested. Past performance is no guarantee of future performance. Capital is invested at risk This document is published by Clear Capital Markets and does not constitute a solicitation or personal recommendation for the purchase or sale of investment. The investments referred to may not be suitable for all investors. Any data or views given should not be construed as investment advice. Every effort is made to ensure the accuracy of the information, but no assurance or warranties are given. Clear Capital Markets Limited is authorised and regulated by the Financial Conduct Authority FRN 706689.