Yesterday’s weakness and indecision in the markets, prompted by a general dearth of major news, has been banished as investors look to some surprisingly positive data from the eurozone. Market-moving economic data has been absent so far this week, so today’s figures have been gratefully received by a market that, the occasional stop-hunt aside, is still casting around for reasons to move higher.
In London, weaker Chinese numbers from HSBC’s flash purchasing managers index (PMI) were quickly pushed out of the way by eurozone PMIs that give the smallest hint that, just maybe, things aren’t quite as bad across the Channel as had been previously thought. Particularly heartening was a welcome return to form by the German economy, which saw its august manufacturing sector move back into expansion territory. However, to cast a small shadow, it must be noted that France continues to lag behind its great partner across the Rhine; president François Hollande still has much work to do. ARM Holdings is enjoying a bounce after its and Apple’s results in the past 12 hours, helping to dispel some of the gloom that had surrounded the tech sector after a slew of weak earnings reports last week.
The procession of housing data continues with new home sales on the list today. Given the slightly underwhelming nature of earlier housing figures, a strong report today would be a much-needed tonic. The wait for the S&P 500 to hit 1700 goes on, but you get the feeling that once it does happen we may see a quick move higher. Ahead of the open, we expect the Dow to start 30 points higher, just below 15,600.