European Stocks Rebound After Crash; Fed Vision
European stocks resumed after a drop on Wednesday. Investors discussed signs of a tightening of the US Federal Reserve’s aggressive policy and its impact on economic growth. The Stoxx Europe 600 Index rose 0.6% in London; One day after, It released Its most giant slide in almost a month. The supply of health care and chemicals was higher, while the supply of energy and miners was lower.
Demand for risk assets globally declined initially this week. Forced technology stocks to sell because the Fed’s plan to cut the balance sheet and raise interest rates “rapidly” against inflation could send the economy into recession. However, “investors welcomed the Fed move. Analysts estimate that reducing the balance should take years, not months. This will limit the negative impact of faster action on growth and the economy.
Investors in Europe are also concerned about economic growth due to the Ukraine war and rising corporate revenues and commodity prices. According to experts, although the rise of regional stocks is limited; Still pessimistic positioning and moods and strong April seasonality contribute. Against this background, a more comprehensive range of markets is expected shortly.
European Stocks and Fed Vision
Meanwhile, Morgan Stanley strategists said that the European market is not currently assessing the risk of shrinking GDP. However, the recession in Europe is much higher than usual. Low capital ratings reflect hazards to earnings estimates expected to decline in the coming months. They find that the prospect of risk aversion is more difficult for European stocks.
Monica Defend, head of the Amundi Institute, noted that European stocks are less attractive than their US counterparts because of the region’s energy dependence on Russia. Also, because of its geographical proximity to the war. Obviously, in Europe, it might be possible to collect good stocks, though the advantage has changed.
Shell Plc has shrunk after saying that its withdrawal from Russia would reduce $4 billion to $5 billion. Against this background, extreme volatility in energy prices in the first quarter could hurt cash. Atlantia SpA, on the other hand, has reached a maximum over the last two years; The freeway and airport company could become the target of a tender war.
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