European stocks were mixed on Friday, with the FTSE 100 dipping over 1% and below 6,800. The new Donald Trump vision for America is drawing the attention of international capital. This renewed belief in a better environment for corporate America is at the expense of Europe and especially emerging markets.
Malaysia and Indonesia have been caught in the eye of the emerging market storm. The central banks of both nations were forced to defend sliding currencies. Hot money has steamed across the Pacific into US assets.
There is a bout of profit taking and short-covering taking place on the FTSE 100. Utilities and telecoms, some of the worst hit in a return to risk-on sentiment are higher whilst financials and industrials have turned lower. One of the best weeks for copper prices in 30 years has made miner Antofagasta (LON:ANTO) amongst the biggest weekly risers on the FTSE 100.
A two year high in German inflation did little to boost demand for the euro which slumped against the British pound. Politics is still the driving force for sterling, but this time it’s a positive one. On the UK side, before the election, Donald Trump’s trade advisor said the US would reach a trade deal with the UK before the rest of Europe. On the EU side, there is rising concern that upcoming elections, starting with the Italian referendum next month, mean it is the next target for the rise in populism.
Stocks in the US look set for a lower open as investors take a breath after a wild ride this week. The losses come despite well-taken quarterly results from Walt Disney. Bond markets are closed for Veterans Day.
Disney shares look set for a higher open with chief executive Bog Iger’s bullish sentiment on ESPN helping to dispel disappointment at another poor quarter for the cable TV network.
USA pre-opening levels
S&P 500: 10 points lower at 2,157
Dow Jones: 36 points lower at 18,771
Nasdaq 100: 48 points lower at 4,699
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