The gains of last week were overshadowed by a directionless end to Friday’s session, but with the real start of earnings season still some days away indices look vulnerable to a fresh drift lower, until positive headlines start to cross the newswires.
The International Monetary Fund has reiterated warnings that growth may struggle this year, and this has left mining stocks out in the cold so far this morning, contributing to a 15-point drop for the FTSE 100. There is a sense that markets have gotten a little ahead of themselves, becoming over-eager in the wake of non-farm payrolls, and traders are asking the question, ‘Now what?’
Mothercare has found buyers after reports that institutional shareholders have rallied to the company’s defence, but the more opportunistic in the City are still looking to build positions ahead of another bid for the company.
US traders will drag themselves wearily back to work after their long weekend, but the same picture appliest to Wall Street as to European bourses. Can indices hold their ground until earnings season begins in force, or will the small-scale booking of profits continue to eat into the advances made last week?
Ahead of the open, we expect the Dow Jones to start 40 points lower at 17,028.