Second day of solid indices gains although FTSE 100 stalls

The FTSE 100 has trimmed its morning gains, and is now up just 20 points, but on Wall Street bullishness is evident once more.

• FTSE 100 stalls in afternoon trading.

• US indices keep rallying.

• Earnings season remains supportive of further gains.

It is a solidly-positive end to the week for markets, which have built on yesterday’s rebound to make further inroads into the losses of September. The FTSE 100 finds itself capped around the summer highs, after poking its head above them in early trading, but on Wall Street the Dow is some 3% higher, or over 1000 points up, from Wednesday’s low. Once more the sellers were able to push markets down, but not hold them there, and like a ball escaping from being held under water, US indices have rocketed higher over the past 48 hours. Arguably the cue has been the solid wall of comments about earnings and the US economy, which have provided the necessary catalyst to turn Wednesday’s tentative buying into the flood of purchases seen on Thursday and in today’s session. From the looks of it we are on our way higher over the medium term, and while FTSE 8000 and Dow 40,000 might be a way off yet, both are now arguably feasible goals over the next year.

Earnings season has only just begun to hit its stride, but if it continues in a similar vein to the past few days equities will continue to find support. After a tough few weeks risk assets are back in vogue, helped by the disappearance of the debt ceiling concerns for now. The growing supply crunch, typified by the rows of ships waiting outside harbours, is still the bigger concern however, and something that isn’t going away any time soon. Stocks have found their footing again it seems, and are in a good place to keep moving higher for the time being.