This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Yesterday we saw wide ranges, big swings and a US market that closed right on its lows. A 40-point range for the S&P 500 is a tough day at the office, and similar big moves lower in Asia greeted European traders returning to their desks this morning.
Any name with a sniff of commodity exposure is struggling, be it oil or metal. Brent crude is below $90 for the first time in over two years, iron ore is in a similar position and this is making related names feel very unloved. Throw in an unquantified Ebola risk discount to the travel sector and TUI Travel (-4%) finds itself looking up from the bottom, a familiar feeling having spent the last four days in the losers corner.
The fact that the FTSE has been beaten to the 10% from the highs technical correction moniker by the DAX, is of little consolation. Despite closing up last night somehow after a whipsaw day, Europe’s powerhouse economy has given the impression of leading the selloff from the front. Europe’s VSTOXX volatility index is pushing towards 22 and its year-to-date, ahead of the closely watched US equivalent which closed at 18.76 last night.
In the face of the selling in Europe, the US market is trying to hold itself close to a breakeven opening call, only giving away another point on the S&P for a price of 1927.