There were one trillion reasons for US markets to bounce into Monday and they didn’t disappoint with big gains by industrials propelling the Dow Jones to a new high, construction equipment giant Caterpillar rather unsurprisingly topping the gainers.
Investors are still digesting the passing of President Biden’s infrastructure bill and there’s some chopping and changing going on today as the market figures out what the “once in a generation” investment plan will actually mean for all those companies looking to get in on the action. Generally, the weather is set fair off the back of decent jobs figures and a rather upbeat earnings season but investors know it’s never a good idea to get too complacent.
Danni Hewson, AJ Bell financial analyst, said: “This week brings Goldilocks back to the table and she’ll be dipping her spoon into the bowl of inflation goodness and deciding if last month’s temperature in the United States was more to her liking. The US Fed has certainly indicated it would prefer a slightly cooler morsel but its intention to begin tapering has pretty much been priced in by investors, so unless there is a major upward shock markets should take the figures in their stride.
“On a day that’s been all about travel there’s been a double boost for duty-free favourite Coty Inc. The cosmetic giant now expects annual earnings to come in above most forecasts as the Christmas party gets back en vogue and some streamlining puts it in good shape to deal with pricing pressures. Also continuing to make headlines and some good opportunities to gossip, Tesla has continued to slide. Will he or won’t he follow through on his social media pledge? Elon Musk is never afraid of doing the unexpected or the unpopular but even he must be reconsidering whether such a high-profile gamble was really a good strategy when it comes to deciding his future holdings.
“In London it’s been a rather muted start to the week despite a rebound from cyber security darling Darktrace. The FTSE 250 has struggled to find any cheer and it’s telling that many consumer facing businesses are among the day’s fallers following some rather down beat consumer confidence data. Households are wary, people are worried about how their finances are going to stack up as prices rise further, finances that already beginning to feel the squeeze.”