Today's Markets: FTSE 100 heading for January gain despite turmoil

Solid start to trade in Europe on Monday morning after a rip-roaring close for Wall Street on Friday, repairing some damage done last week. Shares in Frankfurt +1.5 per cent in early trade, London +0.3 per cent with the FTSE 100 trying to recover 7,500, the futures trying to recapture the 200-day moving average... still on to be about the only major index to end the month higher – energy and value has been a safer bet in January 2022 than tech and growth. Rates steady enough this morning, with US 10s around the 1.78 per cent mark, gold muted under $1,800 and the dollar easing back after Friday’s fresh cycle highs.

Wall Street shares leapt on Friday having opened lower; the S&P 500 rallied 2.5 per cent, the Nasdaq up more than 3 per cent. It was strong finish to a wildly volatile week. Doubt is whether the correction swing low is in yet, the longer we stay above 4,222 for the broad market the more you think the market will consider the correction done and move on to a positive grind higher with focus on earnings/fundamentals. Tantrums are usually on the threat, not on the deed. The market knows the Fed is tightening swiftly this year and possibly in every meeting. Retest of this area would be a catalyst for further volatility. Despite the Friday bounce the S&P 500 is still set for its worst month since March 2020, down 7 per cent MTD. The Nasdaq is -12 per cent in January, the Dow Jones -4.4 per cent. Smalls cap Russell 2k is off by 12.7 per cent in January. Growth vs value – no contest: the iShares S&P 500 Value ETF (IVE) is down 4 per cent YTD vs a drop of almost 14 per cent for the iShares S&P 500 Growth ETF (IVW).