Stock markets have rallied on the back of a run in oil prices and comments from the ECB hinting at more quantitative easing, helping to recover some of the falls in the market this week. ECB president Mario Draghi hinted at further QE, saying he would “review and possibly reconsider” monetary policy at the next meeting. His comments helped to boost markets, leading to the European Stoxx 600 index opening up 1.9 per cent. In Japan the Nikkei 250 leapt 6% and other Far Eastern markets were up 2%. Currently, The Footsie is also up 2%.
Markets were also aided by comments from the chief executive of Saudi Aramco saying that oil prices of below $30 a barrel are “irrational”. His comments led to the Brent crude price rebounding to around $30.50 a barrel, from a low this week of just over $27 a barrel.
Some times known as the Fear Index (I don’t know why as it is actually the opportunity index), the Chicago Board Options Exchange Volatility Index for the S&P 500, the VIX, closed at its highest level since September at about 28, while Europe’s VStoxx Index reached its highest level since August in intraday trading on Monday. Whatever the people paying $27,000 a ticket at Davos are saying, they haven’t a bleedin’ clue either.
China’s economy grew by 6.9% in 2015, compared with 7.3% a year earlier, marking its slowest growth in a quarter of a century. This had been forecast by the Chinese government and, lo, it came to pass. Anyone actually believing the figure probably also believes that the property market in Aleppo has great potential.
This is a commentary written by David Cowell, Director, at Myddleton Croft Investment Managers