The U.K. Stockmarket
- Opposition to Theresa May’s Brexit deal from leading Eurosceptics seemed to soften this week and sterling rallied strongly. This didn’t help UK stocks which were generally lower this week.
- Sentiment was helped though by better-than-expected Chinese manufacturing data and increased optimism that the U.S. and China could reach agreement over the trade dispute.
- Our Breadth indicator stayed positive and our Momentum indicator turned positive this week.
The U.S. Stock market
- The week started on a positive note following tweets from President trump over the previous weekend announcing he would delay higher tariffs on Chinese goods (due on 1st March) as there had been “substantial progress” in negotiations.
- However, Robert Lighthizer, chief trade negotiator, dampened enthusiasm midweek by saying “much still needs to be done”.
- Economic data was disappointing, e.g. December housing starts fell sharply as did consumer spending.
- Our Breadth indicator stayed positive this week and our Momentum indicator (although still negative) ticked higher again and is close to turning positive.
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