Spreadex Market Update

New rounds of asset purchases



Risk assets continue to do one of two things at the moment: hold ground or advance. Investors and money managers are once again faced with the seasonal consequences of looking into Q4 end, where stock buybacks, sound liquidity and a current absence of bad news flow helps underpin prices into the holiday season. Seeing equities whip back from their October lows to then make new highs is about as solid a signal that can be found in the near-term. But that’s not to say the market isn’t selective. Indeed, US equities remain in favour over European and some emerging market equities, citing the right economic noises versus worries of deflation from the alternatives.

What we’re now faced with are new rounds of asset purchases from parts of the world other than the Fed, like Japan and potentially Europe. But who’s to say the money won’t seek to go where best rewarded? Money is still likely to find its path of least resistance to the best returns, not just to from where it came. So investors will keep a close eye on the outperforming equity market in the US.

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