US stocks motor ahead as car makers reverse

Heading into the close the FTSE 100 is still languishing in the red, but US indices are racing higher.

US flag
Source: Bloomberg

Markets remain stuck in a closely-fought contest between the optimists and pessimists, and while in Europe the latter still appear to be in charge, on Wall Street the buyers are back.

Just as US markets yesterday torpedoed a nascent rally, today our American cousins are doing their best to stymie any further bearish momentum.

Car makers dominate the news today, with Fiat Chrysler, Peugeot and Renault all hit hard, with the latter two due to an emissions investigation that doubtless has its roots in the VW scandal of 2015.

As with banks, investors are learning that scandals do not tend to stop at one firm, and with car firms so prominent on the French and German exchanges, it is no surprise that the CAC and DAX remain firmly in the red.

In London, there is an impressively wide spread between the top riser and faller, with InterContinental Hotels hard hit following the events in Jakarta.

Tesco has followed the lead of Morrisons and Sainsbury’s in beating low expectations, as sales rose over the festive period. Perhaps the big names are beginning a fightback, but it is a long road back to their former glory.

Oil prices are enjoying a rare pause in their downward slide, but it still looks to be only a matter of time before they continue their exploration of the $20 zone. The combination of bearish factors remains the key driver, with no hint of real production cuts coming from the key producers.

Further helping sentiment was a decent set of figures from JPMorgan, which rose 2%, with strict cost control helping and return on equity holding at a steady 9%.

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