View: Near-term equity upside doesn’t change longer-term bear picture
The returns from the summer’s front running exercise have been very healthy across many equity markets but now central banks have actually delivered, directly in the case of the BoE, the Fed and as of this morning the BoJ and via promised intervention by the rather more standoffish ECB, the question comes back to whether this move is actually sustainable. As ever there is the sales pitch that valuations are compelling which appears particularly relevant for the beleaguered Eurozone periphery and the more dubious view that higher equity markets themselves are a precursor to better economic times. Of course the central bull driver really is positive expectations as to how this further quantitative easing will impact asset prices, reflecting on the lift risk assets saw following QE1 and more relevantly QE2.
Full report below…
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