US and European markets have rallied as investors digest the news of yet more China stimulus, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.
Stocks make gains as China hits the stimulus button
“It has been a week that has seen huge gains for Chinese markets, while indices in Europe and the US have reacted enthusiastically, if not with quite the same big gains in prices. The risk of a US recession has diminished and now Chinese economic weakness is being counteracted by some impressive action on the part of authorities there. Stock market bears are running out of reasons to support their negative theses.”
Can an October slump spoil the party?
“On a macro basis, the outlook might look solid, but there is still the problem of October to navigate. This being an election year, investors would be wise to be at least mentally prepared for some volatility in the coming month, even if this merely tees up the post-election rally.”
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