There’s a definite risk-off sentiment emerging right now, with traders seemingly struggling to find much upside. China may be celebrating the National Day holiday this week, but that hasn’t stopped the publication of private factory PMI data from Caixin being printed. This shows smaller businesses starting to feel the fall-out of the trans-Pacific trade war and could strengthen Beijing’s resolve in the weeks ahead. Europe is dogged by concerns the Italian government will do little to stabilise the common currency and although the tone of dialogue over Brexit appears to be improving, there’s still doubt that agreement can be reached – or that Theresa May can survive a leadership challenge.
With this as a backdrop, the fact we continue to see positive economic signals emerging from the US – which in turn translates into the prospect of even higher interest rates at the Federal Reserve – it’s perhaps no surprise that markets are looking nervously at what lies ahead. There’s not much on the US economic calendar today, but we do seem to be at least seeing a pause for breath. A correction is inevitable – it’s just a question of how long we have to wait.
Ahead of the open we’re calling the DOW down 96 at 26555 and the S&P down 12 at 2913.
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Too much uncertainly in the world