Yesterday’s ‘sea of red’ has been washed away, replaced by an avalanche of green aross global markets as investors step right back on to the equity rally train.
- Stock markets stage a 180-degree turnaround from Thursday’s losses
- Europe leads the way, but gains solid across Wall Street as well
- Earnings season to provide a hurdle for equities?
It seems incredible to report, but, for US indices at least, the latest ‘dip’ (that one from yesterday of about eight hours) has already been bought. Yet again al the things that stock markets seemed to worry about yesterday don’t matter today – a hawkish Fed, rising Delta cases and the imminent arrival of US earnings season have all been brushed aside as Friday’s trading ends in Europe with markets in bullish form, while on Wall Street stocks have a definite spring in their step. Even the slowing growth fears that apparently motivated Thursday’s sudden ‘air pocket’ for stocks have been thrust aside, and the S&P 500 is now contemplating new record highs with a vigour that seemed implausible just 24 hours ago. European stocks have really found a new lease on life today, which comes despite the growing signs of a crisis in the continent’s fight against Covid-19. Inflows into equities have been strong all year, but neither they nor the rally itself show any sign of slowing down.
Crude oil is also moving to the upside once again, making it a day for growth assets, those whose gains are predicated on a rebounding global economy. Despite a weaker UK GDP figure for May this morning the faith in the recovery remains undimmed. Next week’s earnings from US banks should provide further information on this theme, but with the bar having been set pretty high thanks to Q1’s good numbers stock markets might yet face an uphill struggle in the short-term.
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