A second night of stock buying and oil price rallies has the market bear on the back foot at today’s opening. Ahead of a week packed with market events global stocks bounced hard – dead cat or not. The strength pushed futures markets to indicate gains of 1-2% across the Asia Pacific region today.
Stronger than expected US home sales and manufacturing indicators helped spur buying in Fear of Missing Out rally. Although European manufacturing and services industry readings were generally lower than expected, all readings showed steady to expanding conditions. As current share market levels are indicating further deterioration, any evidence that there is no change in conditions, let alone improvement, is enough to inspire powerful further rallies.
Another busy week beckons as markets await the minutes from the latest FOMC meeting, China manufacturing numbers, Australian CPI and a full week of US company reporting. The huge gains in oil prices in the last two sessions ( 4% then 9%) have eased pressure on sentiment, but reports from US shale drillers will have much greater significance than usual.