We’re in a bit of a rut at the moment and following last week’s sell off the bulls have hardly been rushing back into equities to pick up cheap stock. The economic data over the last few weeks has failed to keep up with the expectations of the market when through July and August we were regularly being surprised by the strength of the reams of figures being released. So just now those expectations are being dampened by numbers that seem to indicate things aren’t recovering as quickly as so many of us have been expecting. Last week saw the poor US employment data and this morning UK industrial and manufacturing production has come in way below consensus forecasts.

With the majority of analysts split about what sort of recovery we’ll see it will be intriguing to see who’s right in the end. The “W” camp though is getting more and more support as we trudge along this path to recovery at the moment, but when all the state aid’s gone, how will the economy be able to sustain growth levels? It looks near impossible to imagine that we won’t dip back into a recession down the line when unemployment is so high and only going to get higher.

Maybe it’s the weather that’s suddenly turned miserable influencing the bearish undertones of this morning’s comment, but the market seems to be shrugging off the bad news and focusing on the good. Mining stocks are flavour of the day once again and defensive stocks are heading up the losers. Mining stocks have benefited from a good move overnight in Asian markets and also seem to like the Australian interest rate hike, which is the first rate hike from a G20 nation since the crunch.

Gains have been capped somewhat and as mentioned above there hasn’t been the same mad rush to buy stock as there has been every time the market’s dipped in the last few months. It shows how there’s a degree of apprehension ahead of the US earnings season which gets underway tomorrow. What investors really want to see now is that corporate profitability can catch up with the earnings estimates. Firms have largely been through the bout of cost cutting, although there’s more to be done, so now we want to see revenue increases.

Cable was recovering earlier this morning back above the 1.6000 until the industrial and manufacturing numbers came out and it shed 100 points in about 40 minutes, so now we’re back below 1.6 having found a little support around 1.5950. This has meant that sterling/euro has taken a tumble and is not far off testing the September lows. The trend is against sterling/euro at the moment, but if it feels unloved it has to look at the dollar is suffering relentlessly.

Oil is back on the bid and gold is higher as the dollar gets whipped around. Back to the 1020 level for gold and not far off this year’s high of 1024. After that it’s the all time high at 1028, but buying at these levels seems dangerous when you look at the sort of corrections that have gone before.