Thursday 22 November 2018

Markets rebound amid “promising signs” of bottom

Markets were mostly higher on Wednesday.

The S&P 500 rose 0.3 percent and the STOXX Europe 600 rose 1 percent. However, the Nikkei 225 fell 0.4 percent.

A report on Wednesday showed that orders for US durable goods fell 4.4 percent in October.

Neverthless, Kevin Divney, senior portfolio manager at Russell Investments, said “we don’t see a broad, systemic reason why the market has been selling off” and “we expect to continue to see stock-specific buyers out there, taking advantage of compressed valuations”.

Tom Essaye, president of the Sevens Report, wrote in a note that “yesterday had some of what we look for when trying to identify selling capitulation”.

Similarly, Andrew Adams, analyst at Raymond James, pointed to a host of other observations that he said offer “promising signs that have prevented us from losing all hope” that the market has bottomed.

In contrast, Jeffrey Gundlach, founder of DoubleLine Capital, said: “We don’t have anything resembling a panic low ... which means stocks have further to go.”

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