Stocks feel sluggish ahead of European trading
The mood of the market seems rather choppy and despite a modest performance from bearish buyers yesterday, it doesn’t really give us any new direction in terms of risk sentiment and equities. The S&P 500 index shows that we are consolidating a bit as the push and pull continues:
Asian equities are feeding off of Wall Street’s positive rally yesterday, while European futures are also pointing a little higher trying to catch up with the late rally in US equities. However, US futures indicate that risk remains low with S&P 500 futures down 0.3%, Nasdaq futures down 0.4% and Dow futures down 0. .3%.
On the one hand, we have already assessed the maximum hawkishness of central banks a little and it can be said that for certain market prices, traders have exceeded a little. *cough into ECB*
That said, that doesn’t take away from the fact that we are seeing risks of stagflation and a pronounced economic slowdown globally. But as we look at past rate hikes (possibly), the focus will shift to when central banks start talking about rate cuts – tailwinds for equities – instead. It may not happen until the end of 2023, but as the economic data deteriorates day by day, we are only surely getting closer to this timeline.