Stocks continue their post-central bank sulk
|It is just one week until markets wrap up for Christmas, but at present a festive rally seems a dim prospect.
Stocks sell off once more
“If there is going to be a Santa rally then investors need to think very hard over the weekend about where to find it, since at the moment sentiment points towards a very Scrooge-like Christmas. Central banks have sent a clear message (again) this week to equities, telling them that they are very much on their own, and that there is no jolly fat man in a red suit turning up to hand out presents. At this point, traders might settle for Jerome Powell handing out an orange or two, but even this seems too much to hope for.”
Gold and silver shine
“It is not all doom and gloom however. Despite the stronger dollar, precious metals have been able to hold their ground, and in gold’s case actually claw back some of yesterday’s losses. History suggests that gold tends to do well once inflation has peaked, even if the hiking goes on, so perhaps those hoping for a late recovery in equities next week would be better placed trusting in the shiny metals for a pre-Christmas surge.”
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