US markets quiet overnight, Europe worries dominate
IG Market's analyst Cameron Peacock's global market report.
IG Market’s analyst Cameron Peacock’s global market report:
Overnight, US markets finished little changed after a sharp rally in the previous session to kick of the new year, with ongoing European issues continuing to keep investors wary about the prospects for markets in 2012.
Among the major averages, the Dow Jones Industrial Average added 0.2% to end at 12418, the S&P was flat at 1277 as was the NASDAQ which closed at 2648. Among the major S&P sectors, materials, technology and industrials were all modestly higher, while financials finished lower.
Issues out of Europe once again plagued market sentiment. Commercial banks held record overnight deposits, with the ECB highlighting a continuing unwillingness to lend to each other, a €5 billion auction of 10-year German Bunds was barely covered and UniCredit, Italy’s biggest bank, had to offer shares at a massive 43% discount to get a €7.5 billion capital raising away. These were certainly concerning signs for Europe and this was reflected with the FTSE, DAX and CAC all weaker between 0.5% and 1.6%.
On the other side of the Atlantic, the outlook seems to be becoming increasingly optimistic, and there is a growing belief that the US economy can continue to expand even in the face of a European recession.
US data over the last few months has been increasingly positive and frequently beating expectations, and this was evident again last night with factory orders for November rising 1.8%, up from October’s 0.2% decline.
NBR staff
Thu, 05 Jan 2012
Thu, 05 Jan 2012
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US markets quiet overnight, Europe worries dominate
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