MORNING BID-Month-end blues on markets

A look at the day ahead from Tommy Wilkes.

The battle between an army of retail traders on one side and
hedge funds betting against companies on the other is quickly
wiping out stock market gains for 2021. The S&P 500 is 0.5% off
tipping into the red for the year

European equities have opened weaker and Wall Street seems
poised to do so as well after Asian stocks posted their steepest
weekly loss in months. The risk-off mood is keeping the dollar
firm while risk-sensitive currencies are down.

Apart from wild share price swings, investors are also
concerned about flagging COVID-19 vaccination campaigns. An
increasingly ugly spat between the European Union and drugmakers
over how best to direct vaccine supplies is showing just how
complex the global vaccine rollout is proving.

Furthermore, global economic data is starting to look a lot
less rosy. The U.S. economy contracted last year at its sharpest
pace since World War Two. German fourth-quarter GDP, due later,
is forecast to show a year-on-year drop of 4%.

It all adds up to a much more gloomy end to January than the
euphoria at the start of the month when a strong asset price
rally was anticipated.

There is no sign moreover that small-time traders' assault
on hedge funds' short positions is over -- online brokerage
Robinhood said some of the trading curbs slapped on Thursday,
will soon be lifted.
Key developments that should provide more direction to markets
on Friday:
Japan's industrial output extended declines in December
-German jobless/flash GDP Q4;
-UK Nationwide house prices
-Colombia central bank policy rate decision
-U.S. core PCE/Chicago PMI/University of Michigan sentiment
index
-U.S. corporate events: Caterpillar Chevron, Colgate Palmolive,
Eli-Lilly, Honeywell,
-Sweden's Ericsson Q4 earnings beat estimates benefiting from
5G equipment sales and the ban of China's Huawei in some
countries; Spanish Caixabank's Q4 net profit rose 49% from the
same period in 2019; BBVA plans a 10% share buy-back, dividend
pay-out in 2021.

(Reporting by Tommy Wilkes)

Tesco