Take a look at the market ahead from Julien Panthas.
One would think that with CNN’s popular gauge of investor sentiment stuck in ‘extreme fear’, there would be some significant good news to lift the market these days.
But what it took yesterday was Kovid-19 optimism from China and a decent US retail data jolt to send global equity markets back to a pleasantly bullish risk-on mode.
Tech and growth stocks that many investors can no longer touch have been surpassed by Microsoft, Apple Tesla and Amazon raising the S&P 500 and Nasdaq.
The upbeat mood was hard to reconcile with BofA’s self-described “extremely bearish” monthly survey which shows that fund managers have not been underweight on stocks since May 2020.
Traditionally tired traders were also more than happy to push the dollar further away from last week’s two-decade high and jump into risky currency bets by demanding a টক 30k return on Bitcoin across Oceania, Asia, Europe and even cyberspace.
Adding to the upward thrust enjoyed by dollar rivals is the rapid rise in bond yields that show confidence that central banks will be able to maintain fiscal tightness despite fears of a prolonged recession and the City’s economic surprise index falling into negative territory.
Even US Federal Reserve Chairman Jerome Powell insisted that raising interest rates as much as necessary to control inflation did not deter the buy-the-deep crowd.
While it stands in Europe this morning, the latest batch of data could have the bulls hesitant before taking this temporary bounce further.
Consider this: In the last few hours, Japan has announced that its economy contracted during the January-March period, China says new home prices fell in April, and Britain posted the highest inflation rate of 9% in April since the 1980s.
Key developments that will give the market further direction on Wednesday:
– Australia Q1 dominates wage gains, take the heat out of the rate negotiations
-Philipine c.bank says ready to work under inflationary pressures
-Dutch bank surpasses ABN Amro’s Q1 profit estimate
– UniCredit, Commerzbank discusses merger early 2022, but cancels plan
Aviva targets are on track as Q1 general insurance sales grow 5%
– German Finance Minister Christian Lindner and EU Commission President Ursula von der Leyen attend the annual press conference of the German Economic Council.
-Christine Lagarde, President of the European Central Bank, and Fabio Panetta, Member of the Executive Board of the ECB.
– Patrick Harker, President of the Federal Reserve Bank of Philadelphia, CEO of the Virtual Mid-Size Bank Coalition of America, spoke before the talk about the economic outlook.
(Reporting by Julien Panthas; Editing by Beach Chatterjee)