Markets mixed but US gains raise hopes for rally

Markets were mixed on Thursday, the first day of October and the fourth quarter.

The MSCI All-Country World Index rose 0.4 percent, the S&P 500 added 0.2 percent, the STOXX Europe 600 fell 0.4 percent and the MSCI Asia Pacific Index rose 1.6 percent.

While US stocks rose for the third consecutive day on Thursday, some analysts are not convinced that a bottom has been made.

“We need to see fewer companies hit new lows, and more companies hit new highs,” said Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird & Co. “Without it, it looks suspect.”

However, others are more hopeful.

“The extremely oversold global equity index sentiment readings that have been realized over the past week tend to occur near medium-term trend reversals,” J.P. Morgan analyst Jason Hunter wrote.

“The consensus is that equities are going through a 1998-like fall correction followed by a rally in the fourth quarter,” said Martin Roberge, an analyst at Canaccord Genuity. “We agree.”