Tuesday, 10 January 2017

Markets fall, “may see significantly more downside”

Markets failed to sustain the previous week's rally on Monday.

The S&P 500 fell 0.4 percent and the STOXX Europe 600 fell 0.5 percent.

Oil fell, with West Texas Intermediate crude tumbling 3.8 percent.

The US 10-year Treasury yield fell five basis points to 2.37 percent.

Michael Hewson, a markets analyst at CMC Markets, noted: “Last week’s optimism is giving way to a raft of profit taking.”

Indeed, Sven Henrich of NorthmanTrader.com thinks that the current market rally is on its last legs.

“Risk has been priced out of the market,” he said. If the S&P 500 falls below its 25-day moving average, “we may see significantly more downside”.

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