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.
Having seemingly recovered from their China-induced panic, investors have lapsed back into old habits, taking PMI figures from China and other places as a reason to abandon equities once again. With still a while to go until the fabled St Leger’s Day arrives, it seems investors are content to stay away until better times arrive.
With the IMF once again warning on global growth, it appears even the cheaper valuations on offer last week are not enough to tempt people back into risk assets.
Unsurprisingly, it has been the mining sector that is among the hardest hit in London this afternoon, as the dire numbers from China ensure that the sector starts the new month on a note very similar to which it finished the old.
UK manufacturers are feeling the impact of weaker Chinese demand for goods, a sign that there is no part of the world that can escape China’s malaise.
US indices have been hit by both China news and hints that September is still a possibility for a rate hike. The problem for stocks at the moment is that no central bank, a key driver of risk appetite in recent years, appears to be willing to ride to the rescue of embattled investors.
Oil prices have spent the day trimming gains following yesterday’s jump, as markets realised that there was little of substance behind suggestions that fresh talks among key suppliers were likely. Overall, it looks like the volatility of August is likely to remain with us into September.