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Bounce Proves Short-Lived as Equities Begin to Creep Lower

  • European markets opened well on Wednesday morning, reflecting a bounce off the week's lowest levels and a stabilization of the risk outlook. Wall Street followed suit, with the hardest hit tech names leading the recovery and prompting the NASDAQ to show decent early outperformance.
  • These patterns soon reversed following the London close, with the familiar theme of value over growth re-emerging to pressure indices back toward the week's lower levels. The softening of price action was less dramatic than earlier in the week, with no new lows being printed, but continues to show that a rally back toward early September's alltime highs could be difficult absent fresh macro catalysts.
  • The materials sector was the poorest performer in the S&P 500 thanks to a stalling in the recent commodities rally - with mining and exploration firms the hardest hit. The likes of Freeport McMoRan and Newmont Mining were off close to 2% apiece.
  • Utilities and consumer staples - typical defensive names - were the firmest, underlining the still-fragile nature of markets.
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