The U.K. Stockmarket
- The U.K. stock market fell at the end of the week along with most European indices as increasing contagion fears regarding Turkey’s problems and further anxiety about U.S. trade tariffs weighed on the markets.
- Brexit fears persist and the Pound fell to its lowest level versus the U.S. Dollar since June last year and was weak against most other major currencies.
- Our Breadth Indicator turned back to neutral this week but our Momentum indicator ticked lower again.
The U.S. Stock market
- The U.S. stock market rallied at the start of the week following positive second-quarter earnings but ended the week lower following a sharp dip on Friday as investors focused on the Turkish economy and its souring relationship with the U.S.
- The VIX, often called the Fear Index, closed at 10.85 on Wednesday, the lowest closing level since early January, indicating complacency in the market. As so often happens after a meaningful low in the VIX, there followed a sharp drop in the market on Friday with the S&P 500 index closing down sharply and the VIX shooting up to close at 13.16 by the end of the week. Even so, U.S. equities continue to out-perform other regions.
- Our Breadth indicator turned neutral and our Momentum indicator ticked up again.
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