Equity markets across Europe are flying as the final session of the week gets underway, with traders clearly showing some signs of confidence that there are some bargains to be had at these levels. All the major regional indices are currently in positive territory although as always, the question has to be whether this proves to be sustainable in the longer term. We have some relatively low level data out of the Eurozone this morning, but given the tentative nature of matters, anything that serves to draw attention to the flagging economy has the potential to inject yet more fear into stocks.
It’s been a mixed finish to the week for Asia with the strong Yen weighing on the Nikkei, whilst the Shanghai Composite is also under a degree of pressure with reports highlighting limited liquidity ahead of a raft of new IPOs. The Hang Seng however is pushing higher, with the fact protestors have been cleared from Hong Kong’s streets in a very peaceful manner lending some support here.
Looking ahead to the US open, futures are currently suggesting we’ll see some bumper gains at the bell. However, given the DOW has ranged almost 1,000 points over the last five sessions, this volatility needs to be put in a degree of context. In terms of fundamentals, the Michigan consumer sentiment data could provide some direction but it really does seem to be trader sentiment that will be calling the shots. GE, Honeywell and Morgan Stanley are amongst the earnings highlights due before trade gets underway too, but for now we’re calling the DOW up 133 at 16250 and the S&P up 16 at 1879.