After a sea of red across global equity markets on Monday following weak Chinese export data and disappointing Euro industrial production figures, Asian markets managed to rebound early Tuesday with futures also indicating a positive start to European and U.S. equities.
Despite the recovery today, risks remain to the downside especially if more data is received confirming that the global economy is heading into a synchronised global slowdown.
That’s why it’s difficult to see positive momentum resuming for the remainder of the week.
From a macro perspective, the main encouraging news is the Fed has returned to being the market’s friend by being patient in considering further tightening in monetary policy, and valuations are much more reasonable than they were three to four months ago.
However, these two factors may not be sufficient to fuel a sustainable bull rally.