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The Trader: European stocks kick off July with strength, eyes on OPEC+

Shares in London have started the month on a positive note
The Trader: European stocks kick off July with strength, eyes on OPEC+

 

  • FTSE100 pops through 7,100 again
  • China manufacturing index cools
  • Eyes on payrolls, OPEC 

European stock markets have made a solid start to the second half of the year, making up for yesterday’s losses, whilst Asian shares got the session off to a soft start. Equity indices are looking positive this morning as the FTSE 100 rose 1 per cent and popped above 7,100 again, with the Euro Stoxx 50 and DAX also both +1 per cent, but continue to tread over well-worn ranges.

European and global stock markets have enjoyed a strong run-up in the last six months as a combination of ultra-loose monetary policy, fiscal largesse and a vaccine-enabled reopening of economies allowed investors to look ahead to a brighter future for earnings and growth. Now there are risks on the horizon, but the market remains biased to the upside. That’s been evidenced by fresh record highs on Wall Street as the S&P 500 notched its fifth-straight record closing high. The broad index has risen more than 14 per cent this year, while both the Nasdaq Composite and Dow Jones are up by more than 12 per cent. As bond yields remain subdued, US markets have benefitted from a rotation out of the reflation/reopening trade back into the mega cap growth/tech/growth area of the market, which is propelling the market to new records. The lack of such companies in European indices is perhaps a factor in why they have failed to keep pace.

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