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Markets Lose Lustre Despite Decent Open From Dow

Published 15/02/2018, 15:32
Updated 21/10/2020, 09:15

The markets lost some of their lustre as the day went on, the previously plastered on smile beginning to wane following the US open.

The Dow Jones’ start wasn’t bad by any means. The index jumped around 130 points after the bell, taking it back above the 25000 mark. However, that rise is roughly half of the growth promised pre-open, a shortfall that is likely explained by the latest US PPI data. The headline figure came in as expected, rising from -0.1% to 0.4%; the core reading, meanwhile, smashed forecasts, doubling estimates to arrive at 0.4%. Those hawkish numbers appear to have been enough to temper investors’ early enthusiasm, undermining the market’s recently displayed resilience.

Over in Europe the region’s indices suffered a larger pullback. The FTSE, which at points was up half a percent, is straining to keep out of the red, while the DAX fully gave up the ghost, dropping by more than 50 points to 12330 having teased 12500 during the morning session. Only the CAC continued to look strong, and even then its unemployment rate-inspired 0.8% rise is notably lower than its lunchtime peak.

The European downturn is likely related to the continued strength of the pound and the euro against the dollar. Cable rose above $1.406 following a 0.6% increase, taking sterling to its best price in 10 days, while the single currency has spent Thursday aggressively eyeing its $1.25, 3 year high mark.

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