Online Stock Trades - European Stock Markets Rally
Stock Market News
Financial stocks continue to rally with the FTSE finishing up at 3988 although off the day's highs, after Goldman Sachs reported higher-than-expected Q1 earnings.The Goldman Sachs report gave online trading a short-term boost to the markets but shortly thereafter the US markets turned down with the DOW currently down 127 at 7933 despite Barack Obama saying the economy was showing signs of recovery.
Ben Bernanke is also due to speak, so we shall see what effect his speech has on the stock market. The DOW is at 7916 (down 140 points as he starts)
The markts have of course rallied quite significantly since bottoming in March at around 6600 on the DOW.
Goldman Sachs beat market forecasts with Q1 net profit of $1.81bn but they also intend raising an extra $5bn through the sale of common stock to repay some of its TARP borrowings.
Some analysts remain cautious. Andrew Stimpson at Keefe, Bruyette & Woods pointed out that European banks have rallied over 50% from their March lows, saying ”While their low valuations justified a recovery, we do not see banks’ fundamentals supporting sustained sector outperformance and remain neutral on the sector.”
Insurance companies also rallied. Legal & General rising almost 15% to 56p.
Divyang Shah from IFR Markets was also cautious ”It is important to put this rally into perspective. What is being bought most aggressively are those sectors that had been beaten up the most. Market psychology was overly bearish and the fact that global firms are still cutting capacity suggests that the outlook is still a moving target.”
Nevertheless stock markets do seem inclinded to rally and for the time being it seems that the wiser move is to buy the dips rather than sell the rallies.
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