Risk appetite recovers after post-Fed malaise

Wall Street has rebounded this afternoon, lead higher by tech names, as post-Fed caution is thrown to the wind. 

• Indices recover thanks to softer Fed policy outlook
• BoE remains an unwilling passenger in Brexit journey
• Trading in Levi’s begins, but questions about future growth linger 

US markets have come storming back this afternoon after a mixed day for Wall Street yesterday. While banks are suffering on concerns that a more dovish interest rate outlook will hurt performance, the usual suspects in the tech sector are racing higher, providing an indication of resurgent risk appetite. Low inflation, ongoing stimulus and a recognition of the risks facing the US economy have proved to be an ideal environment for equities. Meanwhile, the Bank of England continued to warn of the hit to the economy from Brexit uncertainty, but the bank is as much a victim of this uncertainty as everyone else. It has deliberately left its policy options open in order to provide  room for
 manoeuvre, as it waits to see how the drama will play out. It is hard to imagine a more dire set of circumstances, as the institutions of UK government find themselves almost entirely out of their depth.

The IPO of Levi’s has gone well, with an initial pop on the first day of trading. But the structure of the shareholding, with the founders retaining overall control, is hardly an example of American capitalism at its best, and concerns about the weakness of growth in its core markets, which have lagged behind the broader clothing category, may limit the appeal of the stock beyond the initial excitement of the IPO.