Stocks continue to bounce back today, driven by the signalling from global central banks that they will act, if economic activity deteriorates.
First we heard from Jerome Powell on Tuesday, the Fed Chair. He opened a prepared speech by saying they would “act as appropriate to sustain the economic expansion.” Today we heard from the second most powerful central banker in the world, ECB President Mario Draghi. He echoed the sentiment of the Fed, acknowledging the global trade war risks, and said they were prepared to act, if needed.
What does “acting” mean? It would mean cutting rates by the Fed. It would mean restarting QE at the ECB.
For now, it’s all an effort to verbally massage market sentiment. And it’s working, at least for the moment.
Add to this, we had some positive news on U.S./Mexico negotiations.
With that, let’s look at some key charts …
First, here’s a look at the S&P 500 …