US holiday leads to lacklustre day

Heading into the close the FTSE 100 is 50 points lower as a quiet news day prompts dealers to book their profits. 

US flag
Source: Bloomberg
  • Traders need positive news to stay long
  • Dealers nervous ahead of Chinese data
  • Glencore asset sales can’t stop sellers

The London market is sliding as we approach the end of the trading session, and the old culprit that is the mining sector is dragging the benchmark lower. The losses in the mining sector are relatively small when compared with the losses it registered recently, but dealers are looking ahead to Chinese trade balance figures due overnight, and they are not taking any chances.

There has been a lot of chatter about a stimulus package from Beijing, but that has neither been confirmed nor denied, and traders are getting anxious. There hasn’t been much news flow in the markets today, and traders have developed the attitude that no news is bad news. Investors have short attention spans and they constantly need reasons to remain long and today didn’t deliver any real news positive or negative.

Glencore is continuing its asset-stripping scheme, but it hasn’t stopped the sellers getting their way. The stock has staged a remarkable recovery over the past two weeks, and today’s move lower is just jitters ahead of Chinese data that is due out this week. Glencore’s sale of mines is good for its cash balance, but the feeling it is selling at the low in the minerals market is undermining confidence.

In the US, the Dow Jones is broadly unchanged, at 17,091, as many traders are enjoying the Columbus Day holiday. The NYSE is open for business, but very little is being done, and whenever a large portion of market participants are off those who are working often sit on the fence.

Dennis Lockhart is still calling for an interest rate hike in 2015, and has warned that the slowdown in China will hurt Europe more than the US.  

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