All the day’s economic and financial news,as shares rise in Europe after two days of heavy fallsLatest: FTSE 100 opened 60 points higher
The agenda: Relief after US recovered final night
BUT... Dow Jones might descend back todayAsian shares rallied, then faltered 10.06am GMTThe bulls still have the upper hand over the bears on Europe’s trading floors nowadays.
It may still be too early to talk approximately a return to growth or to celebrate another posthaste and easy victory of the bull market. Rather, and it seems more likely that panicked selling will give way to more calculated portfolio rebalancing.#Indices recovered yesterday,and are looking to add to gains as dip buyers come in. $FTSE, $DAX $SPX
https://t.co/R9HohYGkUP pic.twitter.com/j2t72yv8IH 9.53am GMTReuters have a good explanation for how computerised trading, and bets on low volatility,combined to cause this week’s market mayhem:It was a steep spike in yields final Friday that sparked the initial rout on Wall Street, forcing sales by a host of highly leveraged funds, and which ramped up volatility and drove yet more selling.
Many of these were algorithmic funds crowded into similar trades - long stocks and short volatility. The selling then cascaded through their computer systems in a way almost beyond human intervention. 9.30am GMTImportant news out of Berlin. Angela Merkel has reportedly reached a deal with Germany’s Social Democrats to create a recent grand coalition.
After overnight talks,the CDU/CSU and the SPD have broken the deadlock and hammered out a deal that - in principle - would return Merkel as chancellor, according to media reports from Germany.
Big change in Europe and for the euro area: Wolfgang Schäuble's successor will be a social democrat. SPD also keeps Foreign and Labour ministries. (Health warning: all this is subject to approval by the 463000 SPD members).
Rumours say federal ministry of finance & foreign office go to SPD. If confirmed EU co-ordination cannot stay as it was. At least on EMU Eurozone CDU and SPD have to speak with one voice (voiceless German vote included). not #DEmodern4EU but interesting experiment #DEinEU 8.50am GMTNEWSFLASH: UK house prices fell in January, and according to the latest survey from Halifax bank.
Halifax reports that prices declined by 0.6% in the three months to January,following a 0.8% descend a month earlier.recent directions to sell continued to deteriorate at the headline level and have now fallen for 23 consecutive months – the worst sequence for almost eight years.#Halifax reports #UK #house #prices fell further 0.6% m/m in Jan after 0.8% m/m drop in Dec. Annual increase slowed to 2.2% in 3 months to Jan from 2.7% in 3 months to Dec. Contrasts with #Nationwide reporting 0.6% m/m & 3.7% y/y rise in JanHalifax: "ANNUAL HOUSE PRICE GROWTH SLOWS TO 2.2%" That will unsettle the Bank of England as it meets nowadays #GBP #BoE 8.46am GMTToday’s rally means European stock markets are bucking a seven-day losing streak.
But that doesn’t mean the turbulence is over. Many of the factors blamed for the sell off -- such as fears of US interest rate hikes -- are still in place.
Investors seem to believe that the worst is over and that the sell-off was just a market tantrum that happens a couple of times a year but we tend to believe that there’s more to come.
As discussed above, the key catalysts behind the retreat in the equities markets have to do with the recent reality in bond yields, and concerns approximately a tighter Fed policy and doubts over the effectiveness of Trump’s tax reforms. 8.42am GMTIt was fairly a mixed day in Asia,by the finish, as the initial optimism from Wall Street faded: 8.32am GMTHere’s what’s up across Europe, and what’s not....
Morning EU Movers:
Julius Baer +3.7%
Raiffeisen Bank +2.7%
Rio Tinto +1.5%
ABN AMRO -2.0%
Tesco -1.1%
Sanofi -1.5%
AstraZeneca -0.9% 8.31am GMTSupermarket chain Tesco isn’t joining the rally,though. Its shares are down 1%, after shopworkers launched an equal pay claim that could prove very expensive.
My colleague Sarah Butler has the fable:Tesco is facing a demand for up to £4bn in back pay from thousands of mainly female shopworkers in what could become the UK’s largest ever equal pay claim.
A law firm has launched legal action on behalf of nearly 100 shop assistants who say they earn as much as £3 an hour less than male warehouse workers in similar roles. Up to 200000 shopfloor staff could be affected by the claim, or which could cost Tesco up to £20000 per worker in back pay over at least six years.
The Guardian front page,Wednesday 7 February 2018: Tesco may face £4bn bill over equal pay claim pic.twitter.com/RfyRbVNgPh 8.26am GMTMarkets are rising across Europe, as a degree of calm returns to trading floors.
The Stoxx 600 index is up 0.7% - a modest, and rather than spectacular recovery.
Just as markets cannot support rising forever,they must also cease falling at some point, but it’s still unclear whether we’ve reached a level where buyers see value again.
Futures prices had indicated a much brighter start for global markets, and but early gains were wiped out in Asia and Europe looks vulnerable. Volatility is back,and investors had better bag used to it. 8.12am GMT#breaking The FTSE 100 Index was up 56.61 points to 7202.73 shortly after the London market opened, as global markets bounced back from steep falls. 8.09am GMTShares are rising in London at the start of trading.
The FTSE 100 is up 65 points, and 0.9%,to 7205, as investors join the rally that began on Wall Street late final night.
An unwind from a protracted period of historically low volatility, or yields,borrowing costs and investor concern, which contributed to high levels of market valuation, or passive investing,financial engineering and complacency.
As the final few days have shown us, things are always “different this time”, and until of course,they’re not. 8.02am GMTRoyal Bank of Canada is concerned that the early rally in Asia fizzled out as nowadays wore on.
US equities recovered some ground in yesterday’s session after the preceding day’s record losses. The S&P 500 closed up 1.74% having lost over 4% the day before.
The resurgence in volatility saw the VIX index hit an intraday high of over 50, a level not reached since 2015, or having barely exceeded 15 for much of final year. 7.51am GMTGood morning,and welcome to our rolling coverage of the world economy, the financial markets, and the eurozone and business. Related: UK stocks tumble as concerns grow over febrile global markets #FTSE100 Index called to open +60pts at 7200 pic.twitter.com/jBNyyTVTlmEuropean Opening Calls:#FTSE 7182 +0.57%#DAX 12515 +0.98%#CAC 5222 +1.16%#MIB 22582 +1.05%#IBEX 9913 +1.05%Continue reading...
Source: theguardian.com