Stocks set to bounce in early trade
Stocks wobbled as yields on U.S. Treasuries shot to a three-month high, exacerbating worries in a market already unsettled by a nasty fight over the U.S. debt ceiling, the fate of a massive infrastructure spending bill and the meltdown of heavily indebted Chinese property developer China Evergrande Group.
The S&P 500 posted is worst monthly return since March 2020 as investors appear to be concerned about the threat of rising interest rates. This week we will get the latest read on the Non-Farm Payroll number in the US, which will provide further clues about the health of US economy.
The global energy crunch has continued to put pressure on gas prices after China ordered its state-owned companies to do whatever it takes to secure supplies for this winter.
The latest unsettling developments have added to the inflationary fears of European markets, with the FTSE 100 index finishing a challenging week more than 1% lower.
Markets are likely to remain largely unsettled in the UK. The slump in recent weeks has been attributed to the end of the furlough scheme and the nation’s energy woes, which have both been compounded by concern regarding global inflation and monetary tightening.
Stocks look set for a slightly stronger start this week following on from the mild strength seen into US close on Friday.
Stock to watch today
easyJet shares have been in corrective mode since reaching highs of 921.8p back in May 2021. Since then, the share price has been contained within a bearish channel reaching key support at 552p. Buyers were quick to take advantage of the shares reaching this level, which has prompted a push higher in price and a breakout of the bearish channel to the upside. This should lead to a continuation higher over the short term. Over the medium term we believe there is potential for the shares to get back to those May highs around 920p.
CCM Opinion: BUY
Buy between 660 – 710p
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