Market update: Tapering anxiety is back on the menu, but Chinese data lifts commodities – 01.11.2013

Source: Henderson Global Investors

The notion that tapering of monetary stimulus in the US could come sooner than expected has added to investors’ anxiety since Wednesday and is reflected in declines in risk assets. In a second consecutive day of losses in the US markets, the three major equity indices closed lower on Thursday. However, this masks the fact that all three ended the month of October with solid gains (Dow Jones 2.8%, S&P 500 4.5% and Nasdaq 3.9% respectively). As the Q3 corporate earnings report season continues, data compiled by Bloomberg showed that of the 356 US companies that have reported so far, 76% exceeded analysts’ expectation on profits, and 53% beat sales estimates.

Asia was caught between tapering anxiety and better Chinese manufacturing activity overnight; the former exerted a bigger influence and a number of major indices closed in the red. In China, official Purchasing Managers’ Index came at 51.4 in October from 51.1 previously lifting commodities, but the subcomponents of the index disappointed. European markets are trading lower this morning. Despite a positive start, the FTSE 100 was down 0.1% at the time of writing as the markets digested Asian and US trading patterns. The FTSE Eurofirst 300 shed 0.2%. The bloc’s single currency continued to weaken against the US dollar this morning as weak eurozone inflation data has increased expectations for a rate cut.