The past week showed that, in general, the mood on the world markets improved but is still far from ideal. Investors continue to reasonably believe that the emergence of effective vaccines will be the key to rectifying the situation with the COVID-19 pandemic and the virus will be defeated next year.
The second important point supporting the demand for company shares, commodity assets is the resumption of negotiations between Democrats and Republicans last week on new stimulus measures to support the US economy and citizens. Markets are rubbing their hands in anticipation of cheap money that will allow asset values to start accelerating again, as they have done before.
Interestingly, we do not see intense excitement and widespread growth in purchases of everything in a row. Following the recent rally, a high degree of caution has begun to emerge in equity markets. Stock indices fell into a consolidation period, and some of them, such as the EuroStoxx 50, fell into line. Such dynamics tell us that the previously existing potential for optimism, which pushed the markets up, is too close if not completely exhausted. Only investors’ belief that the end of the pandemic has already begun to dawn somewhere keeps it.
On the other hand, there is still no decisive negative factor that could disrupt this idyll and push the markets down, forcing them to correct.
What to expect soon:
Observing everything that happens, I believe that the general state of affairs will persist for some time.