News Column

MARKET COMMENT: Wall Street Set To Follow European, UK Equities Lower

July 7, 2014

James Kemp

LONDON (Alliance News) - US stocks are set to follow their UK and European counterparts marginally lower Monday, having risen sharply on Thursday, as US investors return from their extended weekends.

US equities posted strong gains in the Independence Day-shortened week last week, buoyed by some much better-than-expected employment data from the world's largest economy on Thursday.

The upbeat data saw the DJIA, S&P 500, and NASDAQ Composite all close up around half a percent Thursday, with both the S&P 500 and DJIA ending the day at record high closing levels. The former closed up 0.6% at 1,985.44, while the latter closed up 0.5% at 17,068.26, closing above the 17,000 mark for the first time.

However, this positivity is set to be somewhat pared Monday, with US stock futures pointing to a fractionally lower open.

"After last Thursday’s stunning jobs report induced rally, US markets look set to open lower in what will likely be another lower than average volume US trading day with minimal economic data and some American investors still away for a long independence day holiday weekend," said Jasper Lawler, a market analyst at CMC Markets.

Ahead of the New York bell, the DJIA and NASDAQ Composite are both expected to open down 0.2%, while the S&P 500 is called to open down 0.1%.

In the UK, prior to the US equity market open, the FTSE 100 is down 0.3% at 6,849.02, the FTSE 250 is down 0.7% at 15,938.07, and the AIM All-Share index is down 0.2% at 788.73. In Europe, the CAC 40 in Paris is down 0.4%, while the DAX 30 in Frankfurt is down 0.2%.

"The week has got off to a slightly negative start following the long weekend in the US," noted Craig Erlam, a market analyst at Alpari. "In truth, the weakness being seen this morning is probably more a case of profit taking than anything else, despite the numbers from Germany this morning being far from encouraging," he said.

In one of the few data releases from around the world Monday, German industrial production data showed an unexpected 1.8% drop in production in May, missing economists' forecasts for a modest increase. On a yearly basis, industrial production increased 1.3% in May, following a 1.8% rise in April.

In the forex market, ahead of the US equity market open, the pound trades at USD1.7132, EUR1.2598, CHF1.5317, and JPY174.633. The euro trades at USD1.3595.

There is no macroeconomic data still scheduled to be released Monday.

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Source: Alliance News

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