US weakness contrasts with rising European markets

European stocks have outpaced the US today, moving higher as markets look towards more support for the Chinese economy.

European markets rally on hopes of China stimulus

“A gulf has opened between Europe and the US, as the former rally while the latter drops back. US stocks enjoyed such a strong day yesterday that some caution was inevitable, while the mixed picture following US tech earnings and the contraction in US GDP isn’t helping sentiment on Wall Street. But higher commodity prices have helped stabilise industrial European stocks, and crucially the magic promise of Chinese stimulus has appeared, pushing up commodity prices and giving stocks across the continent a lift.”

Oil prices extend gains

“A third day of gains for oil prices comes as talk of a European ban on Russian oil and gas imports steps up a gear. In addition, US consumption has taken a leg higher, assuaging some concerns about a slump in demand in response to higher prices. But next week’s FOMC meeting might prompt some nerves to creep back in again, either as the Fed signals its concerns about growth, or if the dollar bounces again on a more hawkish meeting.”