US rotation vibes don’t benefit European stocks as earnings disappoint | MarketTalk: What’s up today? | Swissquote

Show notes

We went from ‘the Federal Reserve (Fed) could hardly cut in September’ to ‘it would be a mistake not to cut in July or September’ (source: Mohammad El Erian’s Linkedin feed) in a blink of an eye. We’ve been seeing the lower S&P500 and Nasdaq countered by a rise in economically sensitive sectors since about two weeks now. And diving into the S&P500, around 300 of the stocks in there actually gained yesterday, US crude rebounded after testing the $77pb support and the Rusell 2000 stocks rallied 1.26% – reinforcing the rotation trend – from tech to non-tech - after the latest growth update showed that the US economy not only secured a 2% growth but grew at an impressive pace of 2.8% last quarter – double the first quarter number which had seen the growth rate fall to 1.4%.
Interestingly, the US strong GDP read yesterday didn’t discourage the Fed doves yesterday. All eyes are on the core PCE data today.
Unfortunately, European stocks don’t benefit from the reflation vibes as earnings from the European companies fail to keep investors optimistic about the future.
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