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Tech buoyed by Amazon earnings, other stocks struggle

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By Craig Erlam  

It’s been another tough week for European stock markets which ended in the red once more amid concerns over the economy.

Investors have been worried about the eurozone economy for some time and it would appear the ECB shares those concerns.

While that may spare the bloc the added pressure of higher rates over the medium term, for now, the threat of recession is real and that’s weighing on the region’s stock markets.

We didn’t get much of a bump from earnings season this week, which has been quite mixed and not particularly well received.

Obviously, tech is once more the outlier, with the Nasdaq posting near 1% gains, while most other indices sit in the red, buoyed by Amazon’s results.

US economic data hasn’t really moved the dial one way or another, coming in largely in line with expectations.

With markets pricing in a small chance of a rate hike next week from the Fed, perhaps that’s a good thing as it doesn’t further stimulate the debate over the need for further tightening at the moment.

Oil choppiness continues

Oil prices have been choppy throughout the week and Friday was no exception. Crude prices were relatively flat on the day, but as we’ve seen throughout the week, there’s every chance that’s not how they end.

Traders are apprehensive about events in the Middle East and the risk of significant escalation over the weekend.

What we’ve seen this week hasn’t caused much concern, but it’s also occurred at a time when there’s a lot of focus on the growth outlook and the downside risks to it. So that may well be weighing on crude prices at the same time.

Plenty of demand for safe-havens as gold holds firm

Gold’s safe-haven appeal is holding firm, despite signs of relief elsewhere.

It’s marginally lower on the day, but still not too far from recent highs and $2,000. That’s despite the dollar remaining strong and US yields not sitting far from recent highs.

Clearly, there’s still plenty of demand for the traditional safe haven due to the uncertainty that the situation in the Middle East creates.

That may dissipate over time, assuming we don’t see any significant escalation, but traders are seemingly still concerned about the prospect now.

 

Craig Erlam is Senior Market Analyst, UK & EMEA at OANDA

Opinions are the author’s, not necessarily that of OANDA Global Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. Losses can exceed investments.