The reasons to abandon the day’s super-surge began to stack up this afternoon, yet the markets remained resolute in their Chinese export-inspired jubilance as the day continued.
First Opec cut its demand forecasts for 2016, slashing estimates by 50000 barrels a day with the potential for more revisions to come. Then there was yet another poll outlining the damage that would be dealt in the case of a Brexit, news that was swiftly followed by the announcement of falling retail sales in the US.
Adding to the mounting bad news was a report from Reuters stating that US regulators believe JP Morgan (which rose by 3.5%% this Wednesday after revealing a better than expected first quarter loss), Bank of New York Mellon, Bank of America, State Street and Wells Fargo do not have sufficient ‘living wills’ in place to deal with another financial crisis. Along similar lines the IMF warned that the European banking sector (namely those institutions found in Greece, Italy and Portugal) would be unable to deal with a repeat of the 2008/09 recession, stating that ‘a more complete solution to the [region’s] banks’ problems cannot be further postponed’.
Yet despite this string of scary dispatches from around the world the global indices were in remarkable good health this afternoon. The Dow Jones, boosted by the growth from JP Morgan, edged up 130 points, hitting 17850 and fresh 2016 highs in the process; the FTSE, meanwhile, climbed 120 points to 6360, enjoying the freedom given to it by its China-inspired breakout. Over in the Eurozone the Dax, perhaps intimidated by that looming 10000 mark, slightly underperformed its regional peers, the German index settling for a 2.3% rise compared to the more explosive 3% growth seen by the Cac.