European markets stage quick recovery

Markets are resilient despite the risk-off atmosphere.

Source: Bloomberg
  • Markets gain despite Paris-fuelled flight to safety
  • Japan back in recession
  • Taylor Wimpey bullish as wages and jobs rise

Following Friday’s attack in Paris, European indices gapped heavily lower. Yet, just like people, markets have proven surprisingly resilient, rallying throughout the morning. While the total human impact is immeasurable, the economic shockwaves to the French economy could include reduced investment, consumer spending and confidence for an economy that is already under pressure.

However, amid this latest tragedy, the typical gainers seen in times of uncertainty and geopolitical tension have been moving higher, with crude oil, gold and treasuries all gaining.

Japan has fallen back into recession, with the Q3 GDP reading providing a second consecutive negative growth number, coming in at -0.2%. This is the second recession under Shinzo Abe, who has been in power since 2012, and no doubt this brings up many questions regarding the validity of Abenomics, which have been aimed at restoring growth and ending endemic deflation.

For those expecting the Bank of Japan to hold off on any further action, today’s news will no doubt bring the likeliness of further easing into sharp focus.

Today’s bullish trading statement from Taylor Wimpey has pushed the shares sharply higher, following a largely weak November so far.

Coming on the day that Rightmove announced an overall fall in month-on-month house prices by 1.3%, Taylor Wimpey’s statement proves that business is booming, amid rising wages and employment for the homebuilders.

Ahead of the open we expect the Dow Jones to start higher, at 17,255.

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