Friday capped off an already turbulent 2nd week of 2021 with a severely bumpy landing. The markets, then, are in dire need of a pick-me-up, which might be hard to come by during the most fraught inauguration week in living memory.
Casting an eye over the markets this Monday morning and there’s a certain sense of listlessness to the European indices, in part informed by the lack of US trading thanks to Martin Luther King Day.
The overnight data out of China failed to provide the propulsion needed to reverse last week’s losses. For while fourth quarter GDP smashed estimates to come in at 6.5% – essentially back to pre-pandemic levels, and well past Q3’s 4.9% – Chinese retail sales went in the wrong direction, slipping from 5.0% to 4.6%, almost a whole percentage point below the 5.5% forecast. Essentially the Chinese economy might be bouncing back – industrial production was also up, from 7.0% to 7.3% – but not in the way Western investors want.
This meant the European markets softly edged out of the gate, unsure of which direction to take thanks to the mixed signals from one superpower, and the wholesale absence of the other.
The FTSE crossed its arms and refused to move after the bell, instead sitting unchanged around 6,730. The DAX and CAC were hardly any more energetic, dipping 0.1% and 0.2% respectively.
It could be one of those sessions, with precious little on the calendar, and lacking an American intervention this afternoon. The danger for the likes of the FTSE is that the quiet could cause investors to linger on the latest covid-19 headlines. Which is never a good thing.
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