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After a near straight-line move over the final two sessions of last week, stock markets have finally paused for breath.
Miners and oil names were some of the big gainers as risk appetite recovered thanks to Mario Draghi, and with oil seeing some profit taking this morning these firms have come under pressure.
With correlations running high once more the moves in oil command all the attention, with the commodity now essentially the proxy for investors’ hopes and fears regarding the global economy.
Kingfisher’s plan to return capital to shareholders has gone down like a lead balloon, with the shares off 4% so far this morning. The key problem is that trading conditions do not appear strong enough to warrant the diversion of £800 million into investment that may not pay off in the long run.
Plus, with rival Homebase falling into Australian hands, with the prospect of a price war looming, things might get even tougher for the DIY firm.
The focus of the week will be US earnings and central bank announcements, with the former the main event today, especially with Halliburton on the agenda.
With 26% of the S&P 500 on the calendar for the week, it promises to be a busy one for stocks.
In sentiment terms, the onus in on central banks to reassure, following the lead set by Mario Draghi. While the Federal Reserve is unlikely to shift too much on policy, hints that it is revising interest rate projections should mean that the move back into stock markets continues.