After a turbulent time of late it has been a good week for stock market bulls with sizeable gains seen in both European and US markets. The Euro Stoxx 50 could be set for its highest weekly close in almost 2 months whilst the S&P500 has also notched impressive gains.
Bulls look to push higher
After a shaky start to the week the turnaround is all the more pleasing with fears surrounding wars (both trade and actual) easing somewhat and sentiment improving. There’s been a near-constant negative news flow for the markets in recent weeks but the failure to drop below February’s lows has revealed an underlying strength and now it appears that the bulls are wrestling back control of the tape and looking to recoup some of those declines.
Sterling’s rise weighs on FTSE
From a UK perspective the FTSE is lagging some of its peers on the continent and across the Atlantic a little as a strong move higher in the pound - which has moved close to its highest level of the year against the US dollar today - has capped some of the gains for London-listed stocks that are sensitive to the FX rate. Nonetheless it’s looking like a 3rd consecutive week of gains for the blue-chips and the outlook appears far less threatening than it did in the middle of last month when the benchmark fell to its lowest level since 2016.
Bitcoin has biggest jump in months
It’s been a tough year so far for cryptocurrency investors with the euphoria that greeted last year’s meteoric rise a distant memory, as most the largest coins have lost more than half of their value in 2018. Thursday offered a glimmer of hope that the worst of the selling may be over with a massive jump higher in price seen across crypto markets with Bitcoin climbing almost 20% in less than six hours. There’s no known concrete reason for the massive spike of buying pressure with speculation of an end to possible tax-based selling (US tax returns are due 17th April) and potential safe-haven appeal due to the increased geopolitical tensions of late both being touted.
The correlation between the stock market and Bitcoin has been fairly strong in recent months, with one argument seeing moves in the cryptocurrency as a gauge of investor sentiment and at present they are both rising in tandem.