Saturday 27 January 2018

US stocks hit new record but pullback “very likely”

Markets mostly rose on Friday.

The S&P 500 jumped 1.2 percent to another record high and the STOXX Europe 600 rose 0.5 percent.

in Asia, the Nikkei 225 fell 0.2 percent but the Hang Seng surged 1.5 percent to a record high.

A report on Friday showed that the US economy grew at a 2.6 percent rate in the fourth quarter of 2017. Growth was powered by consumers and businesses but held back by declining inventories and a wider trade deficit.

Ian Winer, head of equities at Wedbush Securities, said that the report was “slightly disappointing but I think people who believe in the president and the tax reform and all that stuff aren’t all that concerned with Q4 gross domestic product”.

Indeed, investors see more gains ahead for the stock market, if funds inflow is anything to go by. According to a Bank of America Merrill Lynch report on Friday, funds took in a record $33.2 billion over the last week.

With equity exposure rising at the fastest pace in ten years and cash allocation at a record low, BAML said that a tactical pullback in the S&P 500 to 2,686 is now “very likely”.

No comments:

Post a Comment