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The Trader: Cautious tone ahead of Powell's Jackson Hole speech

Equities in London are up, but only marginally
The Trader: Cautious tone ahead of Powell's Jackson Hole speech

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  • Energy stocks push on but markets are generally becalmed
  • All eyes on Fed chair Jay Powell
  • Stagflation stalks Germany

There has been a mixed start to the open in Europe as investors look ahead with some caution to Fed chair Jay Powell’s Jackson Hole speech. Stocks are hovering around the flatline with the FTSE just in the green. Today in London the miners are back on the front foot with energy and basic resources leading the gainers, while tech led the decline as JustEat Takeaway.com fell 3 per cent. 

Explosions at Kabul airport were the big story and clearly didn’t help sentiment in the market on Thursday. Wall St opened higher with the Nasdaq Composite hitting a record high before getting shaken lower on the violence in the Afghan capital, though broadly stocks were already having a tough session.  The major US indices all ended the day down by around 0.6 per cent. Whilst the situation in Afghanistan removed any idea of a fresh set of closing highs on Wall Street, there was anyways a sense of caution at the highs, which may not be a bad thing for a bull as it’s not the big end-of-rally melt-up you see as a bull run consumes itself. But it’s also not a sign of total confidence in valuations and that really depends on what the Fed does next. Cyclicals showing signs of pause and investors looking for defensive/quality names.  

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