Commodity companies climb higher

In mid-morning trading the FTSE 100 is up over 1% as bullish sentiment returns. 

Two trucks at work
Source: Bloomberg

Stock markets in Europe are making their meek comeback this morning in the wake of the wretched trading session yesterday. The mood is cautiously optimistic today, and anybody who wasn’t burned recently has entered the market. Whenever there is bullish sentiment in the markets investors hop on the band wagon, but they don’t stay on for long as it is usually short-lived.

The disappointing overnight manufacturing figures from China failed to trigger another sell-off in commodity stocks, and let’s face it, China’s economic slowdown is no longer a secret. We are now at a stage where, unless we have awful economic data from Beijing traders will react well to it. Cash has flowed back into  commodity stocks, which are enjoying some needed respite today, but nobody is under the illusion that this will last long.

Shares in Volkswagen are marginally higher today after yesterday’s car crash performance, and the diesel scandal is hanging over the carmaker like a bad smell. The ‘people’s car’ has lost the trust of the people due to the diesel emissions rigging affair, and the fear is that petrol cars may also be sucked into the same scandal. Dealers despise being kept in the dark, and the carmakers as a whole will be a sector to swerve until there is a conclusion to this saga.

We are expecting the Dow Jones to open 50 points higher at 16,380. The US futures market has been elevated by their European equivalents, and today is shaping up to be a day for the bargain hunters. There isn’t a whole lot of positive news in circulation, it is just that there isn’t any dreadful news to rattle the markets. The Chinese story hasn’t run its course yet, and the situation there is becoming bleaker and likely keeping traders on their toes. 

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. 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. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.