There’s a general feeling of relief that the US-led sell-off didn’t accelerate last night. Instead, all the major US stock indices managed to post modest gains despite earlier weakness. It may be too soon to sound the all-clear but so far investors are doing exactly what they’ve done for the past eight years: using any significant pull-back in equity markets as a buying opportunity.
But what will be of interest is to see if this bounce-back has the strength and conviction to push the indices back up towards or beyond recent record highs. Most of the trading gaps which formed after the first round of the French presidential election have now been filled.
So technically there’s every chance of a resumption of a US-led stock market rally. In the near-term much depends on what comes out of Washington. But for now most investors will be happy to go into the weekend with another positive session for the major indices.
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