Tuesday, 2 February 2021

Markets rise, “pressure is now behind us"

Markets rose on Monday.

The S&P 500 jumped 1.6 percent, the STOXX Europe 600 rose 1.2 percent and the Nikkei 225 rose 1.5 percent.

However, GameStop fell 30.8 percent as it continued to diverge from the performance of the wider market.

Some analysts think that the risk to the bull market posed by retail-driven stocks like GameStop is small.

“The return of volatility over the past week has been driven by market positioning rather than worries over growth,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.

Haefele added that “given the speed and magnitude of flows in recent days, we think most of the pressure is now behind us”.

Sam Stovall, chief investment strategist at CFRA, said that “we don’t see the advent of a 1998-style liquidity crisis” and “we don’t think the bull has come to an end”.

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