The spirit that drove the Dow Jones to 33,800 for the first-time last Friday was nowhere to be seen on Monday morning.
Falling commodity stocks put an end to the FTSE’s 13-month peak. A 0.9% decline from Brent Crude, and a sharper 1.4% slide from copper, sent the index’s weighty oil and mining stocks lower, and left the FTSE itself down close to 50 points.
By contrast – and almost certainly contributing to the FTSE’s losses – the pound rose 0.1% against the dollar and 0.3% against the euro. This as sterling tries to reset after a rough set of sessions last week.
The lacklustre showing in the UK comes despite the second big step in the country’s re-opening efforts, and news that business optimism has hit a record high in the UK as firms anticipate a post-Covid comeback.
The Eurozone fared better. The DAX essentially didn’t move after the bell, holding at the 15,220 mark it spent most of last week buzzing around, with the CAC dipping 0.1%.
Looking ahead to this afternoon and, after last Friday’s big push, the Dow Jones is set retreat from its record highs.
The futures have the index down 110 points and back below 33,700. If things go the Dow’s way this week, especially in regard to Monday’s 3-year and 10-year Treasury auctions and Tuesday’s inflation readings, then it could cross 34,000. If not, and fears of rising bond yields and inflationary pressures reignite, then the Dow’s recent gains could quickly unravel.
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