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US GDP revision fails to excite

A surprise bounce in US GDP was not enough to keep the UK in positive territory this afternoon, with the FTSE around five points lower heading into the close.

A US trader
Source: Bloomberg

FTSE stalls

Supermarkets and miners populated the bottom of the FTSE 100 during the afternoon, as the broader equity rally seemed to go into a stall.

News of a lawsuit against Tesco by its shareholders merely piles further ignominy on the supermarket, emphasising just how far the firm’s star has fallen. When a strong revision to US GDP, which came in at 3.9% versus the expected drop to 3.3%, is unable to enthuse markets it is a clear sign that sentiment is finally beginning to turn modestly cautious.

Nonetheless, so long as London holds on to the 6700 area the outlook still looks good for a move higher into Thanksgiving as the US takes a holiday.

DAX watchers should be concerned by the index’s inability to hold on to 9900, since a similar move in Sep tember preceded a hefty decline. If the ECB fails to live up to expectations next week, it might not be a particularly festive season for European stocks.  

US markets trim gains

US indices continue to trim their gains, with the Dow Jones showing a distinct reluctance to head back north to 17,900. Where GDP numbers are concerned, it looks like a case of ‘be good, but not too good’, since any sign of overheating in the US is likely to bring the Federal Reserve hawks to the fore. A drop in consumer confidence also sparked some worries, but the key fact is that Thanksgiving is, as ever, not going to be an easy period for the bears. Any dip is still going to be leapt on to eke out some gains to the upside.

Oil finds buyers

The buyers are back in action in crude oil, taking back some of the ground lost yesterday. Strong figures on US GDP have provided a fresh reason to push the rally a little further, although trading in this commodity has not been for the faint-hearted, as the OPEC meeting looms. Already comments are emerging from the meeting, with indications that more regular price monitoring may be on the cards.

Silver has found support around $16.50, continuing its late-November run of form, although it should struggle in any attempt to break meaningfully above $17. 

Lowe's comments weigh on Aussie

Some jaw-jawing from the deputy Reserve Bank of Australia governor, Philip Lowe, has meant that the Aussie has been the worst performer of the day among the majors, illustrating nicely that anything remotely connected to commodities is still going to have a tough time.

The US dollar has quietened down, but tomorrow sees a storm of economic data from the US as agencies look to get their job done ahead of Thanksgiving. With GDP looking distinctly perky, optimism about the US economy is in plentiful supply.

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