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The US markets rallied more than 1% for most of the day on Tuesday before closing the session marginally lower, with the Dow Jones & S&P500 adding 1.12% and 1.14% respectively, while the Nasdaq closed just under 1% higher, with the boosted higher by stronger than expected earnings out of Goldman Sachs, particularly on the bonds trading front. The big banks in the US reporting solid results overseas eased investor fears of a recession as the results shows investors are still spending. We are seeing these big swings in markets of late due to a see-saw effect of consumer spending remaining high, which eases recession fears, against inflation remaining stubbornly high causing central banks to raise rates to dampen spending and potentially send economies into recession. Investors are constantly torn between recessionary fears and inflationary fears. For markets to settle down investors will need to see economic growth with lower levels of inflation.
Over in the UK and Europe, the global rally extended into a fourth consecutive day in Europe with Germany’s DAX adding almost 1% on Tuesday and the French CAC lifting 0.44%, while the UK’s FTSE100 closed Tuesday’s session 0.24% higher following the move by the UK’s new finance minister to cut backtrack on all tax cuts announced at the country’s mini-budget in September.
On the commodities front, it’s a red start to the day across most commodities with brent crude oil trading down 1.14% at US$90.62 per barrel, natural gas is down more than 4%, iron ore is trading 1.55% lower at US$95 per tonne. Gold is trading just 0.07% higher at US$1651 per ounce and lithium is trading flat.
What to watch today: