Global markets have started to pull back after the largest four week winning streak on US markets since 1983. After rallying by nearly a quarter from the lows of February, investors are understandably keen to book profits. Debate now rages as to whether the recent rally was the start of a meaningful recovery or what is know as a bear market rally.

We have a situation where the market was on a hot streak and arguably due a correction. This may make markets more susceptible to bad news than they were over the last four weeks when it seemed they developed a Teflon coating.

A prediction from respected analyst Mike Mayo, stating that the banks will bank loan losses will exceed depression levels has certainly stunted investors confidence in the financial sector today. Fears persist that markets still haven’t priced in just how bad earnings from US companies are going to be in the next few months. The risk/ reward of this being the case was more appealing when markets were at their lows in February.

As a sign of retreat from risk taking, defensive sectors such as utilities are performing well today with Pennon and United Utilities a couple of the standout performers.

Gold has slumped dramatically as currency markets continue trade in volatile fashion. The dollar has now reversed its early losses on the day and is performing well against the euro and sterling.

Oil prices have taken a dip towards $50 once again, but so far are holding around $51.

By David Evans of http://www.betonmarkets.co.uk.

The above comments do not constitute investment advice and neither BetOnMarkets nor Spread-Betting.org accept any responsibility for any use that may be made of them.