On Monday, Wall Street bounced back with the expectations that retailers have built during the online sales of holiday shopping period. The European stocks also rallied after indication about Italy’s plans for reworking spending plans which have fueled tensions in the European Union.
Oil prices have also recovered from “black” Friday and added to risk-on sentiment. After the European leaders gave approval to Britain’s Brexit agreement, the pound also rose. $7.8 billion has been anticipated by the online retailers on the year’s largest internet shopping day. The shoppers who couldn’t take benefit of the Black Friday deals may flock online to Cyber Monday.
B. Riley FBR’s chief market strategist, Art Hogan said,
All indications are that the holiday shopping sales are robust, and consumer discretionary is catching a little bit of a break today.
The Dow Jones Industrial average went up by 1.46% and the S&P 500 gained 1.55%. The Nasdaq Composite also added 2.06% or 142.87 points. On Friday, the S&P 500 rebounded after recording it lowest close in previous six months which was down more than 10% after September’s peak, pushing it to the correction territory.
The pan-European STOXX 600 index also rose 1.23%, whereas MSCI stocks went down by 0.48%. On Monday, it was reported that the governing coalition of Italy may plan to reduce the budget deficit target of the next year to 2% of gross domestic product for avoiding disciplinary action by the European Commission.
At present, the deficit target of Italy is around 2.4%, way higher than 0.8% which the previous government has set. The euro zone was alarmed by the budget of the country and was in dispute with the Commission.
On Monday, Italy’s banks index went up by 4.83% due to the prospect of lower deficit. The Italian borrowing cost was also affected by a strong rally in bond market send them to the lowest since the month of September.
Source: Reuters, The Edge Markets