- European confidence hit by threat of Delta variant
- US banks earnings will be closely watched this week
- Eyes on inflation too
Stocks in Europe were weaker in early trade Monday, following a fresh record high being set on Wall Street on Friday as equity markets rebounded from a Thursday sell-off. The Dow Jones, S&P 500 and Nasdaq composite all rose by around 1 per cent to set new all-time closing highs. European bourses by contrast are tripping well-worn ranges. Bond markets are steady with US 10s around 1.35 per cent, oil a tad lower this morning, but WTI remains above $74. Gold holds above the $1,800 level for now. The dollar is steady this morning after a couple of big down moves in the previous two sessions.
In the US, the big banks kick off earnings season on Wall Street this week. Thanks to the vaccine roll-out that has facilitated a broad reopening of the US economy, unleashing an apparent torrent of pent-up demand, as well stimulus and other enhanced Federal payments, expectations are very high for Q2. We can ignore the year-on-year numbers and the % gains – this is all fully priced anyway.