Indices Edge Higher Again on Tuesday as Bull Market Charges Forward
“Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria” – Sir John Templeton
January has proven to be an excellent month so far for stocks the world over and today the bull run continued. All key European indices rose as the markets opened, with the FTSE MIB in Italy outperforming its rivals thanks to a rally in bank shares.
In British equities we had some refreshingly good news for the retail sector, as shares in UK food chain Morrisons rose 1.5 per cent following an upbeat sales update.
Analysts eyes have been fixed on the retail space as of late, as rising inflation in the UK continues to put the squeeze on consumers wallets. Just yesterday, ratings agency Moody’s downgraded the credit rating of Debenhams, one of the UK’s largest department stores, after the struggling retailer issued a shock profit warning which unnerved investors.
While European markets continued to rise, US stock futures also point to a higher open, which is no surprise given that the S&P500 has hit a new record every single day of 2018 thus far.
In premarket trading the most active stock was Hewlett Packard Enterprise, which has started to rebound after investors bought the dip from major falls yesterday. Micro Focus, the UK’s biggest technology firm which performed a blockbuster takeover of HP Enterprise’s software business in 2017, saw its shares slip by 17 per cent after announcing weaker sales yesterday, which dragged down the shares on the FTSE100 and Hewlett Packard’s US stock listing too.
The key US indices continue their stellar run as we head into mid-January. The S&P has gained over 50 points in the last 5 days (see chart), fuelling investor optimism for the year ahead. In contrast, the index had lost over 150 points by the end of the first week of January 2016. President Trumps economic agenda and the synchronised global economic expansion are 2 factors helping to maintain the bull run in stocks on top of great year for corporate earnings in major American companies through 2017.
Want to learn more about the markets and how to become a better investor?
Download the Invstr App now.