These figures will rightly get the headlines, however recent speeches from Federal Reserve chair Janet Yellen and a number of FOMC voting members have highlighted the importance they are giving to Average Hourly Earnings in their decision making with regards to interest rate rises. With China enjoying its second day of a long weekend bank holiday, there has been less opportunity for Asian markets to become de-railed.
Mounting expectation that increased assistance will be given to Chinese consumers looking for financing for either properties or automobiles has certainly given a bounce to optimism. This might not be the strong ‘whatever it takes’ stance advocated by the ECB, but it is certainly proactive enough to ease fears.
Volatility has certainly returned to equity markets with several sectors acting as catalysts. A look at the big weekly movers in the FTSE shows four out of five stocks that have risen the most coming from the food retailers, following the release of Sainsbury’s quarterly figures at the beginning of the week. Considering this ‘victory’ is based around them holding onto rather than improving market share, it might be a little early to start popping any of those discount cava bottles just yet.
Miners and car manufacturers, with Glencore and Volkswagen being the focus, have also seen a bounce over the week. However, in both instances the worries over contagion and an inability to believe there are no more problems yet to be unearthed should ensure an absence of over exuberance from traders.
We are expecting the Dow Jones to open 60 points higher from Thursday’s close at 16,284.