Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Mixed Start For Stocks As UK Reopens

By Neil WilsonStock MarketsMay 17, 2021 11:44
Mixed Start For Stocks As UK Reopens
By Neil Wilson   |  May 17, 2021 11:44
Saved. See Saved Items.
This article has already been saved in your Saved Items

Reopening day in Britain – today is a big step forward for the economy, not so big for the stock market. Markets move well in advance, of course. Reopening trades have performed well this year, but the real test comes as the reopening process proceeds – do people get out and spend, do they take on more debt and do banks lend more? These are questions for policymakers, but also for investors. 

After a very choppy week, global stock markets were up on Friday, apparently surviving the big test of the previous few sessions. European stock markets are a tad weaker in early trade, whilst US futures indicate a slightly soft open on Wall Street, with the S&P 500 currently seen opening about 10pts off Friday’s close. Vixx trades higher in the 21-22 range this morning, which could indicate stress for equity markets.  

Asian shares were mixed as Chinese retail sales figures missed expectations. Year-on-year sales rose 17.7% in April, missing the +24.9% expected. It was also a sharp slowdown from the +34% in March. Industrial output rose 9.8%, in line with expectations, whilst fixed asset investment rose 19.9%, slightly ahead of forecast. Rising cases in Singapore and Taiwan are a worry. 

Last week was all about inflation. Various Fed speakers sought to calm speculation as breakevens broke higher. Yields were kept in check, with the benchmark US 10-Year Treasury yield retreating from 1.70% at its highest point last week to around 1.62% this morning. That pop in real yields left gold on the back foot but the subsequent drop in nominal rates against persistently high inflation expectations has seen real yields plunge with 10yr TIPS back to –0.88%, whilst 30yr TIPS have flipped negative again. This has helped gold rally to fresh 3-month highs above $1,850. Next stop $1,880 – the 50% retracement of the downtrend since Aug, with support around the 38.2% retracement at $1,832. Looking ahead to this week, minutes from the latest FOMC meeting will be watched for any signals policymakers are worried about inflation and/or financial stability. Likewise, the Bank of England’s Bailey, Ramsden and Broadbent will face questions about the impact of QE and risks to financial stability when they appear before the House of Lords Economic Affairs Committee on Tuesday. 

Finally, I thought Donald Trump’s ban from Twitter would mean markets would suffer less ‘noise’. I was wrong. First meme stocks came along, now we have Elon Musk moving crypto prices with his missives. The latest in the drama saw Bitcoin jump about $2.5k this morning after Elon Musk denied Tesla had sold its Bitcoin holdings. A nice pop, but this is small versus the Musk-induced selling that has been taking place lately. In addition to Tesla (NASDAQ:TSLA) saying it would stop accepting Bitcoin as payment, Musk indicated in a reply to a tweet that the company was dumping or had already dumped all its Bitcoin. Prices fell sharply over the weekend and at $44k the crypto asset is still down by around a third from the all-time high near $66k set in April. There is nothing new I can say about Bitcoin – volatile, highly speculative, easy to manipulate; a bubble.

VIXX Index Chart
VIXX Index Chart

Mixed Start For Stocks As UK Reopens

Related Articles

Mixed Start For Stocks As UK Reopens

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Any information, analysis, opinion, commentary or research-based material on this page is for information purposes only and is not, in any circumstances, intended to be an offer of, or solicitation for, a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any person acting on it does so entirely at their own risk and ETX Capital accepts no responsibility for any adverse trading decisions. You should seek independent advice if you do not understand the associated risks.
Continue with Google
Sign up with Email