The week has started on a cautious note, as traders have digested the European election results and continue to reflect on Friday’s solid US jobs report, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.
FTSE 100 slips in afternoon trading
“Stocks find themselves hit by several worries today. The stellar payrolls report on Friday has dealt a further blow to hopes of a US rate cut, and snap French elections have given traders something else to worry about. Plus, with US CPI and the Fed on the calendar for Wednesday there is little incentive for traders to plunge back in.”
Sentiment holding up well despite macro concerns
“Given the developments of recent days it is perhaps surprising that stock markets have not suffered heavier losses. But a booming US economy is ultimately good for stocks, and the shock of French elections may turn out to be a buying opportunity if Macron’s gamble pays off. Investors should be prepared for the Fed to err on the side of hawkishness this week, but not excessively so, and the bar to further rate hikes is still very high.”
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