US equity markets rallied on Monday in reaction to the favourable French election result, with Financials regaining some of the swagger that had previously helped them lead US bourses to all-time highs.
Accendo Markets Analyst Mike van Dulken noted – “All three major indices closed over 1% higher, although the Tech-focused Nasdaq took the plaudits, rising to fresh intraday and closing highs. The Dow Jones closed over 200 points higher, steered by Banking behemoths Goldman Sachs and JP Morgan, while the Financial sector as a whole led the S&P500.”
The FTSE, which returned to the mid-7250s off the back of the pound’s losses against the euro, couldn’t substantially build on yesterday’s gains, opening just 5 points higher after the bell. Meanwhile, sterling edged back above 1.28 against the dollar, but failed to kick start a recovery against the Macron-lifted euro, instead loitering at a near 2 week low of 1.176.
Spreadex Analyst, Connor Campbell commented – “The UK is responsible for the one major piece of data this morning: the public sector net borrowing reading. The figure is forecast to remain in the red, rising from £1.1 billion to £2.6 billion month-on-month, news that likely won’t help out the pound.”
Over in the Eurozone things were similarly quiet, the DAX and CAC both increasing by just 0.2%. However, the limited rise still leaves the DAX at a fresh all-time high, and sees the CAC cement the post-financial crisis peak it first reached on Monday, on the back of Sunday’s election.
In focus today will be continued build up to the second round of the French Presidential election as well as a look ahead to Trump’s ‘massive Tax cut plan’ on Wednesday.
Mike van Dulken added – “Note US earnings season continues at breakneck speed as a sixth of all Dow Jones components – 3M, Caterpillar, Coca Cola, DuPont and McDonald’s – publish their Q1 report cards.”