How Windy Is It . . . ? Monday, 15th February 2016 – No.166
How windy was it last week?
After a stormy (both in the markets and the weather) week, there is some optimism this morning as most markets opened with positive numbers (including the FTSE 100 up 2.05%). Japan stocks posted the biggest gains since September on the back of the 11% loss suffered last week.
European stocks also rallied for a second straight session today, with banks being the biggest advancers. The rally came after news the European Central Bank is talking with the Italian Government about buying bad loans from the country’s banks as part of its asset-purchase scheme. Italian banks have been the worst performers during this years sell-off in the financial sector. As the ECB president, Mario Draghi will talk in front of the European Parliament today, investors will look for any signs the central bank is preparing for monetary easing to boost inflation.
Meanwhile, China is expected to release fourth-quarter GDP, industrial production and retail sales data on Tuesday morning. The Shanghai Composite is already down 18% this year and down over 40% from its June 2014 high. China still remains key in determining the global markets future, and we expect volatility to continue for some time. Unfortunately, it is a lack of transparency in the country’s management of its economy and financial system that concerns investors worldwide.
Whilst we continue to buckle up our seatbelts for the ongoing bumpy ride, it is positive to see green (rather than red) across most of the world indices this morning, including home markets. It is also pleasing is to see the commodities markets rally this morning (aside from gold), with oil opening at $33 a barrel.