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Good News From This Thursday's ECB Meeting Is Priced In

ByThierry Laduguie
Published 02/06/2014, 14:03
UK100
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US500
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On Friday we saw some disappointing economic numbers and the FTSE 100 closed down but the S&P 500 closed up. The S&P continues to outperform the FTSE after hitting new highs. The German retail sales were weak but in the current environment bad news is good news. Weak numbers coming from Europe means more stimulus is needed and there is now a good chance Mario Draghi will announce new measures to boost the economy at the ECB meeting on Thursday.

This is bullish for the stock market. Today we see firmer markets in Europe as a result of a strong finish on Wall Street and news that Chinese manufacturing expanded at the fastest pace in five months. The S&P however is unchanged and trading a couple of points below key resistance at 1926 (resistance line).

When sentiment is bullish and people expect some good news from the ECB, the market will be supported until Thursday. I believe that the good news from the ECB is priced in, but we may have to wait until Thursday before investors sell the fact.

S&P 500

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