The mining companies are suffering after disappointing manufacturing numbers from China, and the FTSE’s heavy weighting towards commodity related stocks is holding it back as eurozone equity markets are in positive territory. The economic indicators out of China have gone from bad to worse, and the Beijing authorities have made many attempts to turn the economy around, and after many pricey stimulus packages there is still is no sign the Chinese economy can prevent growth from declining. The mineral extractors are coming under pressure from both sides, as China is demanding fewer metals, and the strong greenback is eroding the value of the underlying commodities too.
The re-opening of the Greek stock exchange triggered an exodus from the Athens markets, but the rest of continental Europe took it as a step in the right direction. The Greek stock market was always going to have a dreadful time whenever it opened again, but it is an indication of confidence that the exchange can be opened at all.
The US market is down 90 points, at 17,590, and the disappointing ISM manufacturing PMI report from the US is a reminder that the economy isn’t as strong as some economists believe. The Federal Reserve meeting next month is at the forefront of traders’ minds, and the ISM report showed a drop off in manufacturing in July, but dealers are still cautious of a rate hike in the near future. There isn’t a major feeling that the Fed will raise rates in September, but at the same time very few traders have the confidence to go long on the market with the expectation of no change from the US central bank.