Quite frankly, the lack of any tangible drivers shows that silly season is back upon us as low volume drives significantly greater price movements. Fortunately, Friday’s bank holiday means we are unlikely to see all this week’s gains eroded in the final two days as was seen last week.
Gains in crude prices have been excessively magnified to pull many beleaguered oil and gas firms higher today, with energy firms leading the pack despite US crude oil hitting a ten-year low this week.
Crucially, oil prices look set to post the greatest weekly gain in almost two months and with US crude inventories falling by 5.9 million barrels, there is a tangible feeling of relief rippling through the sector today.
While the Federal Reserve’s decision to raise its headline interest rate may have provided a bullish assessment of the US economy this month, today’s economic announcements stood in stark contrast to that view. With core durable goods orders falling into negative territory for the second time in three months, it is clear that businesses remain apprehensive when faced with major investment.