Stocks Advance as Risks Recede; Greenback Slides
Comment of the Day

September 04 2019

Commentary by Eoin Treacy

Stocks Advance as Risks Recede; Greenback Slides

This article by Randall Jensen and Vildana Hajric for Bloomberg may be of interest to subscribers. Here is a section:

Stocks in Hong Kong leaped the most since 2018 after embattled leader Carrie Lam said she formally withdrew legislation to allow extraditions to China, the detonator for three months of often-violent protests. In the U.K., the pound surged after Parliament took a crucial first step to block a no-deal Brexit. The euro advanced after purchasing managers indexes for the region beat expectations, while the onshore Chinese yuan gained following another stronger-than-forecast currency fixing.

“The main news is geopolitical, with less risk in Hong Kong, and Italy and the U.K. Investors are reacting positively to the lower geopolitical risks even though there’s still concerns over trade tensions as well as slower economic growth,” said Kate Warne, an investment strategist at Edward Jones. “Overall, it’s a positive day. It’s about offsetting the worries of yesterday which really focused, I think, on geopolitical risks.”

Eoin Treacy's view

Italy has a new government, at least for a while, the Hong Kong protestors got what they originally asked for but their demands have swollen considerably since then, the UK may be heading for an election, but could still end up with a hung parliament and factory figures are not quite as disastrous as many people were worried about. I think it is safe to say that these are modest improvements. Perhaps it would be better to look elsewhere for the reason behind the bounce in equities today.

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