Darren Sinden from educational provider Trade Uni discusses the latest market moves.
US and European equity markets eked out more gains yesterday. The Dax was the best performer among the major markets, finishing the day up by 0.7%, boosted by gains in Delivery Hero (4.4%), RWE (2.8%) and BMW (2.4%).
However, bid target Commerzbank fell by 5.68% as the German government said it would retain a crucial 12% stake in the ailing lender, limiting UniCredit's chances of buying the bank outright. German chancellor Olaf Schulz also said that Germany opposed a takeover of Commerzbank, though he said that without offering an alternative plan.
Energy stocks were the best performers in the US, with the S&P 500 grouping adding 1.31% in the session, even outpacing the buoyant consumer discretionary sector. Energy has posted gains in four of the last five sessions, the sector's five-day gains now stand at 3.91%, and all the stocks in the sector have posted five-day gains.
Interestingly, crude oil is trading higher again this morning in Europe, with WTI rising 1.18% and Brent up 1.01%. European and US natural gas contracts are also higher on the day. Energy-related instruments are up on concerns about increased tensions in the Middle East and a possible escalation of the conflict there, as Israel continues to strike targets in Lebanon.
Real-estate rebounded in the US yesterday, with the sector adding 1.13% and all but one stock finishing up in the session. The sector is perhaps the most obvious beneficiary of falling interest rates. However, three-month gains of 17.76% have left traders wondering if all the benefits have been priced in.
At a stock level in the US, Tesla was the biggest gainer in the S&P 500, up 4.93% and closing at $250 per share. The move was driven by a bullish note from Barclays which forecasted better Q3 deliveries and anticipated good news from the EV-maker's upcoming “robotaxi day“.
Elsewhere, Goldman Sachs made the headlines with a call on GBP/USD, which the bank said would tip over the $1.40 mark within 12 months. Cable has added 0.11% this morning to trade at $1.3365. Gold and silver opened flat this morning, but copper is up by 1.89% following news of monetary easing in China, where the central bank has lowered its reserve requirement ratio by 50 basis points. The move frees up cash at Chinese banks and is designed to stimulate the economy through increased lending.
Turning to the macroeconomic calendar, there are no high-impact events due today. The Reserve Bank of Australia kept rates on hold and maintained a hawkish tone in its efforts to control inflation. However, there are several “second-tier” data releases today, with US house price data alongside the Richmond Fed manufacturing index and IFO business climate data in Germany.
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