Stock markets in Europe are making their meek comeback this morning in the wake of the wretched trading session yesterday. The mood is cautiously optimistic today, and anybody who wasn’t burned recently has entered the market. Whenever there is bullish sentiment in the markets investors hop on the band wagon, but they don’t stay on for long as it is usually short-lived.
The disappointing overnight manufacturing figures from China failed to trigger another sell-off in commodity stocks, and let’s face it, China’s economic slowdown is no longer a secret. We are now at a stage where, unless we have awful economic data from Beijing traders will react well to it. Cash has flowed back into commodity stocks, which are enjoying some needed respite today, but nobody is under the illusion that this will last long.
Shares in Volkswagen are marginally higher today after yesterday’s car crash performance, and the diesel scandal is hanging over the carmaker like a bad smell. The ‘people’s car’ has lost the trust of the people due to the diesel emissions rigging affair, and the fear is that petrol cars may also be sucked into the same scandal. Dealers despise being kept in the dark, and the carmakers as a whole will be a sector to swerve until there is a conclusion to this saga.
We are expecting the Dow Jones to open 50 points higher at 16,380. The US futures market has been elevated by their European equivalents, and today is shaping up to be a day for the bargain hunters. There isn’t a whole lot of positive news in circulation, it is just that there isn’t any dreadful news to rattle the markets. The Chinese story hasn’t run its course yet, and the situation there is becoming bleaker and likely keeping traders on their toes.