Risk appetite has returned after last week’s turbulence. European bourses rose 1-2 per cent in early trade on Monday after Wall Street’s rally on Friday lifted the boats. The S&P 500 was still down for the week, but with the broad market -10 per cent from its all-time highs at the low, those looking for a correction after the hot summer rally may have found it already. The market tested 3200, which is where it reached at the peak in June before the pullback and where it closed 2019. Bonds have not taken part in the drawdown – US 10-year Treasuries have barely budged this month and remain stuck around 0.66 per cent. This might imply that the September sell-off is more about a repricing of risk assets based on valuations and profit-taking after the summer run-up, rather than deeper fears about a prolonged stagnation in the economy.
To continue reading, register today
to enjoy limited access to the following:
- Daily trading news
- Funds coverage
- Features on big investment themes
- Comprehensive companies coverage
- Economic analysis