Resulting in rallies in all asset classes.
The global economy seems to be bottoming.
If the recovery is healthy, is not sure. Because this time it’s not driven by consumers but by governments. Until now.
The last couple of weeks we observe that commodity markets are picking up again. One striking example is oil.
Look to what is happening there:
We can debate what reason is driving oil price higher, but what matters is that oil prices are up. And keep moving up. The rounding bottom and some upside stories are playing out in news and charts. And interest is returning.
From GS:
Being short is no longer an option... you either caught the bull flu and started buying stocks that have lagged, or have decided not to get involved. This is where we are now. Consensus is no longer expecting a difficult H2, instead we are trying to question how far we are in the new growth cycle. Staggering change of sentiment over the past 4 weeks. I will not go on again about what the potential risks facing equities but just looking at the facts: yesterday was our busiest day in a while (sign of a top or start of a big bull trend), the low quality stocks are the ones that have been outperforming, earnings haven't played a big role in calling stocks, it's been more about ownership. Less owned stocks have fared better (UK, Swedes, RUKN) vs well owned (GLE, CSGN etc) which tells me this continues to be more about positioning than a big repricing of growth and the cycle.
A rally is a rally. Overbought or not.
And what if this one was elaborated to give companies the possibility ro tap the marktets for more money? Just a thought.
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