UK Stock-Market
On Monday, Andrew Bailey, Governor of the bank of England, said interest rates could rise before the end of the year due to pressure from inflation. However, ECB President Christine Lagarde and Jerome Powell, chairman of the US Fed, both indicated that recent price pressure would be temporary.
Later in the week data from the Office for National Statistics showed that the UK economy grew by 5.5% in the second quarter, much higher than estimates of 4.8% in GDP growth.
There are number of concerns in focus at the moment including rising inflation and the bearing this will have on the Federal Reserve’s decision regarding tapering timing, concerns over slowing global growth and problems with global supply chains.
Our Breadth indicator stayed neutral but our Momentum Indicator ticked lower again.
US Stock-Market
Stocks retraced sharply last week but rallied back on Friday. Inflation and interest rate fears were in focus with Fed Chairman Jerome Powell saying inflationary pressures remain elevated and “will likely remain so in coming months” but then fade.
The benchmark 10-year Treasury yield hit a 3-month high of 1.567% raising concerns that the Fed could begin tapering its asset purchasing program sooner than expected.
The Evergrande situation remained a cause for concern for investors. The giant Chinese property developer missed an interest payment to its offshore bondholders and has still made no announcement. The company entered a 30-day grace period and if the payment isn’t made will find itself in default. Today the company’s shares were suspended on the Hong Kong stock exchange after reports that a second interest payment had been missed.
The US market rallied back on Friday as a feared US government shutdown was avoided after an agreement was reached with lawmakers to extend government spending until December.
Our Breadth Indicator stayed negative and our Momentum Indicator ticked down.
The Big Picture 1st October 2021
Market Sentiment 1st October 2021
U.S. Risk Barometer 1st October 2021
Europe Risk Barometer 1st October 2021
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