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The Trader: Stocks firm, oil runs into technical problems

Shares in London have steadied but momentum remains hard to find
The Trader: Stocks firm, oil runs into technical problems


  • Stocks in Europe edge higher as inflation fears are played down, for now
  • Facebook rallies through $1trn valuation level
  • Bitcoin set to snap back?

European stocks moved higher in early trade Tuesday after a sizeable down day in the previous session and a rather limp handover from Asia. The FTSE 100 recaptured 7,100, rising 0.5 per cent, after slipping below this level yesterday, having closed down 0.9 per cent. European indices continue to trip along recent ranges having set post-pandemic highs earlier this month as the market looks for more direction re inflation and bond yields. Everyone seems happy to buy the line that inflation will be transitory: the question is what sort of new inflation regime persists beyond this summer. Once the inflation genie is out the bottle it is hard to put back in easily.

US markets are grinding higher along the path of least resistance but on lower volumes and declining breadth. As bond yields remain in check and inflation expectations cool, big tech and other bond proxies are providing the heavy lifting for the indices. The S&P 500 inched to a new all-time high with just healthcare and utilities up and twice as many advancers as decliners. Energy was smoked, registering a decline of 3 per cent, with Valero, Halliburton, Phillips 66, Occidental and Marathon all down 5 per cent. Cruise operator stocks sank 6-7 per cent as Carnival announced an additional stock sale of $500m, whilst Disney delayed a planned test voyage. Growth is beating value right now as the reflation trade unwinds: the Nasdaq rallied 1%, whilst the Dow fell 151pts as the likes of Chevron and Boeing pulled back. US 10yr yields are back under 1.5 per cent, and this morning US stock futures are flat. After a pause, AMC rallied more than 7 per cent. SoFi (Nasdaq: SOFI) is the most talked about stocks on Wallstreetbets, with WKHS, WISH, CLOV, BB, SPCE and GME also still garnering some of the most mentions. 

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