New cases of monkey pox in Europe are fueling sell-off
World indices rose sharply early in the session supported by optimistic news from China. PBoC decided to trim its mortgage reference rate by a wide margin, the second cut this year in order to revive its slowing economy. It seems that news from the second biggest economy offered investors some temporary relief and many of them decided to take advantage of lower valuations even despite disappointing forecasts from retailers, including Walmart and Target. Nevertheless, sellers regained control at the end of the European session. As a result, indices from the Old Continent erased nearly half of the early gains, while Wall Street indices resumed downward move as overall macroeconomic outlook still looks grim and one need to keep in mind that the economy has not yet fully begun to respond to interest rates and excessive inflation. Investors are still concerned about recession or stagflation scenarios and the fact that the FED may not be able to help the markets. Also the new cases of monkeypox recently detected in several Western European countries are also negatively impacting market sentiment.
US100 pulled back sharply after buyers again failed to stay above psychological resistance at 12000 pts and is currently approaching key support at 11700 pts, around which many stop losses are probably placed. Should a decisive break lower occur, downward correction may deepen. Source: xStation5
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