Investor sentiment has been rattled by a resurgence of trade-war concerns following renewed geopolitical tensions. Most major indices in Europe saw significant declines yesterday and continue to struggle today. However, the FTSE has shown some resilience, trading near record highs, supported by gains in defence and mining stocks. A major source of volatility is President Trump’s recent proposal regarding Greenland and associated threats of new tariffs on European nations. This has sparked fears of a fresh trade war between the US and the EU.
As a result the risk of an early trend reversal has increased. I was expecting markets to peak in the next few days but given the bad news and the overbought condition, the trend could turn down early.