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FTSE sees triple-digit losses
The phrase ‘sea of red’ hasn’t been seen for a while, but it definitely applies to this afternoon’s action. The FTSE 100 briefly registered triple-digit losses, with the financial sector being one of the worst performers after JPMorgan failed to live up to expectations for its first quarter. In an almost perverse indication of how bad the situation, insurer Resolution has actually managed to eke out some miniscule gains, with some brave souls pushing the stock higher even as all around it crumbles to ruin. The bulls are clinging on to every tick higher, but the rising trend in this market looks to be seriously under threat, barely two weeks after the last major selloff took place.
Dow holds onto 16,000
We have held 16,000 on the Dow Jones so far today, which will provide some comfort, but the earnings season isn’t providing much help so far. JPMorgan dropped 3% after it missed estimates for only the third time in five years, hobbled by weakness in its fixed income and mortgage departments. However, Wells Fargo saw lower loan losses and falling expenses, allowing it to at least beat expectations with a higher profit. On a day of declines for the broader market, this stock is one that is pushing higher, rising 1.5%, having conclusively outperformed both the Dow and S&P 500 over the past twelve months.
Ukraine tensions boost US crude
US crude took off during the afternoon, as Ukraine tensions made their presence felt. Natural gas has enjoyed a good week too, with fears that Russia might look to cut supplies giving an upward momentum to the price. Judicious use of this tool could give Russia an edge, but given the dependence of the Kremlin on oil and gas revenues it is something of a double-edged sword.
Dovish Fed minutes drag on dollar
The USD/JPY pairing has stubbornly refused to go through ¥101 this afternoon, touching the lows seen yesterday but bouncing once again above a figure that has proved to be quite the support level so far this year. The Bank of Japan, or rather its lack of action, is still the dominant influence here, however, and it seems difficult to see how the US dollar can make much headway given the dovish read on the Federal Reserve minutes.
Meanwhile EUR/USD has touched $1.39, rounding off a stellar week for the currency pair, but a speech by Mari Draghi in Washington on Saturday raises the prospect of some jawboning designed to take some of the air out of the rally.