Relief Rally on Share Prices as US and Europe Make Gains
What a difference a few days make. Stock markets began to rebound strongly in early week trading after the horrendous falls last week. Share prices in the UK had been hit hard, but this mini relief rally was also aided by a weaker British Pound.
The British Pound came under pressure on Monday when talk from Brussels emerged that the UK’s proposed border solution for Northern Ireland is not going down well with the EU leaders.
Brexit worries have been putting constant pressure on GBP and each time it seems progress is being made, another wall gets built for the Government to circumnavigate.
While GBP remains weak stocks tend to perform stronger. So unless there is an agreement soon on the Northern Ireland situation then expect share prices to make more gains over the coming weeks.
In the USA however, strong results from global entertainment company Netflix boosted confidence that the recent sell off was overdone. The Dow Jones surged higher by over 500 points.
To top things off the president decided to Tweet about the rally, stating that the market was up.
Stock Market up 548 points today. Also, GREAT jobs numbers!
— Donald J. Trump (@realDonaldTrump) October 17, 2018
When the president decides to ramp it up, he certainly does it well!
Whether these gains can hold moving forward remains to be seen, but many are talking about new all-time highs to follow into the new year. If you study the way USA stocks have performed since Donald Trump was voted in, then you’d not bet against that scenario playing out.
Pete Southern is an active trader, chartist and writer for market blogs. He is currently technical analysis contributor and admin at this here blog.
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