Wednesday 27 October 2021

Markets rise, Fed “about to shift course”

Markets rose on Tuesday.

The S&P 500 rose 0.2 percent to a record high, the STOXX Europe 600 rose 0.7 percent and the Nikkei 225 surged 1.8 percent.

Craig Johnson, Piper Sandler’s chief market technician, said: “Corporate earnings have been the key catalyst behind the recent record-high rally as robust demand continues to offset well-known supply constraints and pricing pressures.”

However, Ryan Detrick, chief market strategist at LPL Financial, warned: “With stocks at all-time highs, the bar is indeed quite high and tech will need to impress to help justify stocks at current levels.”

Indeed, David Rosenberg, the president of Rosenberg Research, told CNBC on Monday: “The market has gone up way beyond what should be justified by even strong earnings, and that’s because of the Fed.”

Rosenberg said that “the Fed is about to shift course” and “my advice is to start taking chips off the table at these levels”.

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