Equities march forward once again
|Heading into the close, the FTSE 100 is 30 points higher, as the global rebound in stocks continues.
- Indices rise across the board
- Europe puts on a strong performance
- BoE’s problem exacerbated by job figures
The rally is moving from its ‘unstoppable surge’ stage to ‘relentless grind higher. With the Boeing 737-Max issue off the front pages for the time being, the Dow has been able to move higher, while tech stocks are showing healthy strength in the early part of the Wall Street session. In an ironic twist, European stocks are putting in a very good showing, as the monthly BAML fund manager survey reveals that being short European indices is now the ‘most crowded trade’. A few years ago being long Europe was de rigeur, and that didn’t turn out well, so applying a contrarian view might suggest that European stocks are about to see some good months, which would at least go some way to closing the
yawning gap in their performance versus US equities over the past few years. A suggestion that the ECB might start buying equities also played its part, but this seems far-fetched indeed. Europe’s demographics might be heading Japan’s way, but its monetary policy is still quite different.
The Bank of England will have a difficult job later in the week, as it looks to hold the line on policy thanks to Brexit even as the job picture continues to improve. All the BoE can do is to await developments, but today’s solid figures on the jobs and wages front would seem to bolster the case that the bank would like to hike, but that Brexit is holding it back.
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