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Momentum slips ahead of earnings season

Published Wednesday, July 9th, 2014

Risk aversion took hold of global stocks yesterday with investors shunning riskier assets as they braced themselves for the start of the US earnings season. US equities have performed well recently with successive record highs being achieved but the upward momentum has faded as doubts emerge over potential overvaluations. The cautionary mood eventually saw the Dow and S&P 500 slip 0.7% as the former dropped below the 17,000 level.

There wasn’t much cheer on the other side of the pond as Germany delivered yet more weak data, this time in the form of trade figures pointing to a fall in exports and imports in May. This feeling of unease was worsened after the UK revealed a surprise slump of 1.8% in factory output in May compared with April. There was some respite for growth bulls as the World Bank affirmed its forecast of Chinese 2014 GDP at +7.6% although the announcement of lower-than-expected inflation figures for July have highlighted a lingering weakness in the world’s second-largest economy.

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Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.