The S&P500 posted another record closing high last night, but there’s growing concern that he upside for stocks is looking limited. Concerns continue to propagate that global growth is incredibly fragile, a theme which Bank of England governor Mark Carney was keen to reiterate yesterday.
There’s also mounting speculation that resolving the US-China trade spat will leave Beijing with the upper hand, whilst the prospect of US tariffs on a range of European imports also looms large.
A WTO ruling over illegal state subsidies for Airbus is set to be delivered in the coming weeks and there’s a belief that the White House will levy tariffs quickly in response to this news, something which could set the market up for another rout.
In the shorter term, Wall Street will be closed tomorrow for the 4th July holiday so there’s the chance some de-risking could be seen in the near term, especially from these record highs. Payrolls for June will also be published and these could provide fresh guidance over the Federal Reserve’s likelihood to deliver against the market’s ongoing expectation of a rate cut at the end of the month.
For now however, ahead of the open the market is calling the Dow to start up 44 at 26822 and the S&P 500 up 5 at 2978.