After a tricky session on Tuesday, one that saw the Federal Reserve provoke the opposite intended effect with its impromptu rate cut, Wednesday got off to a comparatively calm start.
It can be hard to tell what news investors are going to glom onto. For example, China’s Caixin services PMI plunged from 51.8 to 26.5 month-on-month, a level last seen during the financial crisis. Yet at the same time overnight the World Bank pledged $12 billion to combat the coronavirus, another injection of stimulus following a rate-slashing Fed on Tuesday and Australia’s cash rate cut on Monday.
The positive headlines just about won out after the bell, allowing the European indices to post some relatively measured growth – at least when compared to the wild swings of the last week or so.
The FTSE approached 6750 as it climbed half a percent while the DAX nudged across 12000 thanks to a robust 1.1% rise. The CAC, meanwhile, climbed 0.7%, just about sticking its nose above 5400.
The Dow Jones is looking for a bigger increase when the bell rings on Wall Street, with the futures pencilling in a 400 point surge. Then again, the index did fall almost 800 points on Tuesday night (following that near 1,300 point jump on Monday).
Whether the markets can remain green throughout the session is another question entirely, especially since they’ve got to run a services PMI gauntlet. The UK is expecting 53.2, the Eurozone 52.8 and, later, the US 49.4.
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