US markets try to bounce again

Sentiment appears to be recovering across the board, as European indices claw back losses and US markets attempt to recover lost ground.

Wall Street sign
Source: Bloomberg

Having seen US markets embark on a rollercoaster ride yesterday, the omens did not look good for European markets today. Indices across the continent started the day deep in the red, but have steadily clawed back losses.

China’s injection of fresh liquidity has been seen as a positive move, as the PBoC looks to build on yesterday’s rate cut. The picture still looks unclear, with bulls and bears finely balanced, but so long as markets can hold above the lows of the week then a recovery may still be in prospect. Even the ECB managed to boost sentiment, as one board member hinted that an expansion of QE in the eurozone was still a possibility.

US durable goods were much stronger than expected this afternoon, proving once again that the US economy remains a touchstone of reliability in these troubled times. Fed member William Dudley added further to the general atmosphere of optimism with suggestions that a September rate hike was now much less likely.

Equity bulls on Wall Street now need to maintain momentum and avoid another sharp drop towards the end of the session similar to the one seen last night, or risk handing the initiative back to the bears. 

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.