Risk rally takes hold ahead of tech earnings
|Risk appetite has recovered as investors await tech earnings tonight, and some easing in bond yields is also helping investors to take a more positive outlook, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.
Stocks stage a rebound
“Equities are in bullish mode this afternoon ahead of the start of the big tech earnings bonanza this week. The mood was strengthened by figures from Verizon, which reported solid Q3 figures and raised its cash flow guidance, sending the shares up by the most in three years. We are now firmly into the strong Q4 seasonal period for stocks, providing bulls with their best hope for a sustained rally in months. An easing of yields will aid this outlook too, and notably it is yield stocks that are leading the way higher in London this afternoon.”
Tech stocks to determine market direction
“With the Fed not expected to move for the rest of the year, it feels like this earnings season could be key in determining whether markets do see a decent year-end rally for risk. A repeat of last year’s exuberance is unlikely, given the rise in valuations, but if history is any guide, and if earnings season is of the right kind, then more upside appears likely here. “
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