It feels like the market is waiting for a shove
European equities began the session with modest gains but gave them all away in the opening hour and are now keeping lower, with US futures also seen slightly weaker.
Despite the outperformance in trading yesterday, stocks are still seemingly cautious and tepid awaiting for more clues from Wall Street later in the day.
If anything else, it feels like investors are just waiting for some news to shove price action in any one direction and to give firmer conviction this week.
My take is that talks on additional US stimulus is one to watch, with any further setback i.e. no agreement in the coming days likely to keep stock gains in-check.
But should there be good news, one can expect greed to take over and investors to run with the headlines on anticipated relief for the US consumer down the road.
The other thing to be mindful about is that there is going to be the US non-farm payrolls report later this week.
There have been warning signs popping up surrounding the report and that will be taken into account as to how market participants will view things on Friday.
Granted it is a lagging indicator, but fresh signs of a deterioration in labour market conditions last month as the virus situation escalates may prompt worries surrounding the US economic path in Q3 and that may not bode well for risk assets ahead of the weekend.
