Stock markets have made another 180 degree turn, recovering from Tuesday’s losses, with the FTSE 100 up 90 points in afternoon trading.
- Stock markets move higher together
- Broad buying lifts all boats, but tech and small caps lead
- Oil’s near-term outlook in OPEC’s hands
US markets joined in the general rally in stock markets this afternoon, after comments from the BioNTech CEO overnight and further data suggesting the Omicrom variant is less severe than others helped investors to build a more bullish outlook. November went out on a decidedly poor note, a relatively rare event, especially following such a strong October, but it looks like the buyers that failed to show up yesterday have come back in strong form today. Fed chairman Powell remained broadly confident on the outlook for the global economy, and from the looks of it the volatility of the past few days is subsiding into a ‘buy the dip’ approach from most investors. Tech and small caps have led the way, a classic ‘risk on’ move, but the fact that European and US indices are moving higher in lockstep does suggest that this buying is more durable, instead of the selective move into tech stocks we saw earlier in the week when we had even less data on the new variant than we do now.
A strong ADP report and a fairly solid ISM manufacturing PMI also provided reason for optimism, and this has stabilised the oil price after the dramatic falls earlier in the week. Attention now turns to OPEC, but the cartel is likely to keep production either unchanged, or perhaps even throttle back on planned increases, given that the global economic outlook has clouded of late, and the 20% drop in the price that has helped to ease short term concerns about oil costs acting as a drag on economic growth.
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