After a torrid week Europe attempted to reignite June’s rally, doing so with a fair amount of gusto.
There was little reason behind Friday’s gains, beyond investors deciding that the severe losses of the last few days provide a handy entry point to a market that had gone on a hell of a run at the start of the month.
The FTSE, for example, rose past 6150 as it climbed 1.1% – this on the same morning that it was revealed the UK economy contracted by 20.4% in April.
The data out of the Eurozone was no better, with the region’s industrial production falling by 17.1% in April. Yet that didn’t stop the DAX adding 75 points; the CAC was even stronger, jumping 1.7%.
A huge reason why Europe feels comfortable enough to post such gains is that the Dow Jones is aiming for a 600 point rebound when the bell rings on Wall Street. It’s a sign of just how staggering Thursday’s losses were that such a surge would only recoup a third of that decline. Nevertheless, it is a strong comeback, especially considering the US increasingly looks like it is going to face a second wave of coronavirus cases.
In terms of data, US import prices are set to rise from -2.6% to 0.6% month-on-month, while the preliminary consumer sentiment reading from the University of Michigan is expected to jump from 72.3 to 75.0.
"Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved."