Equities are in a' go-nowhere-fast' mode, with a downward bias in... by Terry Sandven

Equities are in a' go-nowhere-fast' mode, with a downward bias in the near term.

Terry Sandven

Image Embed Code

Categorized in : Company News

I think it was widely anticipated that a deal was unlikely over the weekend and the market has digested that news this morning.

Oil is stabilizing and that is helping to bolster sentiment in ov... by Terry Sandven

Oil is stabilizing and that is helping to bolster sentiment in overall equity returns.

It appears that the extreme bearish scenarios are being discounted at the moment, and there seems to be a bias to the upside.

We need oil to stabilize to provide some confidence for investors, partly because to a degree, investors' stress is high, earnings visibility is low, and market internals continue to weaken.

There is a wall of worry under full construction brought on by China, fall in oil prices and uncertainty regarding quarterly earnings.

There is concern regarding China's ability to manage its economy and while the Fed removed one uncertainty when it raised rates last year, it introduced another with regard to the pace of hikes.

I think at present equities are largely events driven, last week's performance was driven by employment, this week it is oil, next week Dow Chemical -LRB- DOW.N -RRB- is the Dow Chemical -LRB- DOW.N -RRB-.

I think at present equities are largely events driven, last week's performance was driven by employment, this week it is oil, next week it is the Fed.

At the moment perhaps the biggest risk is not raising rates which would be a no confidence vote in the U.S. economy, fuelling investor angst and reducing near-term appetite for equities.

We still think September is the best time for a rate hike, but the pace is going to be slow and methodical.

The stocks are struggling to maintain their swagger and said there is also the seasonality overhang as we go into summer when complacency sets in.