Dax remains in an overall downtrend
The German Dax index recovered along with global equities following the recent bout of volatility, but a look at the charts reveals that it remains in a longer-term downtrend.
"We remain very positive on equities this morning, as expected, we had strong earnings in the US which has so far have bolstered sentiment. The Beige Book yesterday also confirmed a positive outlook for the US economy . I expect equities to remain positive and go higher this week and especially next week which will see tech earnings. So be careful about shorting equities at this point in time," Garnry says.
The positive undertone has spilled into Europe and three regional heavyweights – ABB, Novartis and Nestlé – have either matched or outdone their earnings expectations.
Meanwhile, the ever-flattening yield curve is an increasingly urgent topic of conversation and the spread between US 5-year and 10-year Treasuries is now at its flattest since 2007. Still, incoming New York Federal Reserve president John Williams said he was not concerned at this point.