After rallying hard for the last 2 sessions – effectively clawing back last Friday’s panicked losses – the European rebound slowed somewhat on Wednesday morning.
As the death toll in China nears 500, it appears that investors may need a bit more justification to continue the week’s aggressive gains. For though the FTSE, DAX and CAC did all overcome their initial losses to push 0.2% to 0.3% higher, that’s a) nothing compared to the growth posted across Monday and Tuesday, b) leaves all 3 still way off where they were this time last month.
A large part of investors’ reticence to push significantly higher is that, while it is easy to track the day-to-day impact of the coronavirus outbreak, it is still far too early to tell the full extent of the damage done to the Chinese economy.
It should be noted, however, that the Dow Jones is currently looking to rise another 200 points when the bell rings on Wall Street, something that could give Europe the confidence boost it needs to get back into the swing of things.
Ditto the morning’s services PMIs. If they come in better than expected it could help encourage some positivity. The Eurozone-wide reading is forecast to arrive at 52.2, with the UK equivalent expected to come in at 52.9.
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