Wall Street was up on Monday along with a rebound in European stocks. Investors are also starting to regain their confidence in the oil and dollar markets after another day of difficulties in Asia.
Declines in Asia resulted in a 1.5-2% drops in Korea, Australia and Malaysia. However, the majority of European stocks staved off a shaky start as the start of U.S. trading approached.
In Germany, Volkswagen stocks plummeted 20% on news of the company’s emissions scandal, but despite this, the FTSEurofirst 300 was up a little over 1%.
Greece’s Syriza party bolstered hopes of a bailout program after its unexpected election victory. Portugal’s sovereign rating was upgraded, which helped boost bond markets inthe southern euro zone.
Metals and oil markets rebounded after declining last week. Currencies and emerging stocks struggled as concerns loomed over global growth after the Federal Reserve postponed raising rates.
The EM benchmark dropped 1.5%. Malaysia’s ringgit also declined after news broke that the FBI (Federal Bureau of Investigation) would be looking into money-laundering at 1MDB, a Malaysian state fund.
CMC market’s Michael Hewson stated that the world economy has changed since the Federal Reserve last raised rates in 2006. He noted that it is not just the U.S. central bank, but that the mantle of the global central bank is wearing. Markets are struggling as a result.