Equities continue to move higher as the week draws to a close, with hopes that this rally might last longer than some of the recent failed bounces.
Stocks make fresh gains
“Investors have been more comfortable about buying into this rally thanks to the lack of any hints of 75 bps rate hikes in this week’s minutes. This has been enough to move the sentiment dial out of its trough, providing some space for at least a short-term bounce. Worries about inflation have been the big driver of declines of late, so the slowdown in the PCE price index on both the headline and core measures helped to shore up sentiment as well.”
Recession not fully priced in
“Stocks on both sides of the Atlantic seem content to push higher for the time being, but this isn’t a return to the old ways of steady gains. A gain of even 10% from here might look like an all-clear signal for investors, but growth and earnings forecasts probably need to come down a bit more, which in turn points towards fresh lows for the market in the months to come.”
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