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News

Stocks rally as global outlook improves

market relief

market relief

Stock markets are strong this morning as the geopolitical and environmental issues haven’t turned out to be as bad as traders previously predicted. 

The weekend saw the anniversary of the founding of the North Korean state and the event passed without any provocation, the markets were half expecting a missile test.

Hurricane Irma battered parts of the Caribbean and the US, the damage caused will surely be costly, but the devastation wasn’t as bad as investors were bracing themselves for. Irma was downgraded to a category 1 hurricane, and this is adding to the positive sentiment this morning.

The state of global affairs looked to be a lot worse on Friday, and that is why traders were so cautious. Now that the picture isn’t as bleak as we expected, we are seeing buyers enter the market.  

Insurance stocks were under pressure last week as investors feared for the worst because of Irma, and now Aviva, Legal & General and Prudential are all higher this morning as the insurance claims are likely to be less than initially anticipated.

Fresnillo and Randgold Resources are down this morning as the silver and gold markets are weaker, due to the risk-on attitude of traders.

The EUR/USD is largely unchanged today and since we are not expecting any major economic announcements from the US today it is likely that volatility will be low. Italian industrial production on a year-on-year basis rose by 4.4%, while traders were expecting 3.8% and the previous reading was 5.5%. While the single currency is above $1.2000, the outlook may remain positive.

We are expecting the Dow Jones to open 140 points higher at 21,937, and we are calling the S&P 500 up 16 points at 2477.

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Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.