A sense of relief settled over markets on Friday and investors will be hoping that feeling becomes something more positive from today.
Last week saw an attack of nerves over falling bond yields and record lows for key rates, such as the Australian 10-year yield; inverting yield curves mixed profit reports.
By Friday media hints in Germany about possible budget stimulus helped soften those fears in the wake of news that the economy shrank in the second quarter.
Weak data from China also undermined confidence, while no one cared that Brexiteering Britain also saw its economy dink into negative territory in the June quarter.
Murmurs of more stimulus moves in China also helped steady markets there but the continuing unrest in Hong Kong and gathering pressure from the Chinese government to end it is a greater concern.
By Friday the desperate hoped the ‘leaks’ on possible German moves to relax its hardline fiscal policy stance and budget constraints were enough to spark a rebound – even though the leaks were clearly designed to stabilise markets without any commitment from the Merkel government which has so far shown no interest in helping stimulate the economy.
So while Chinese shares rose 2.1% on stimulus hopes and that European stimulus talk also benefitted the US and European shares on Friday, US shares still fell another 1% for the week, Eurozone shares fell 0.7% and Japanese shares were down 1.3%.
On Wall Street the Dow ended up 300 points on Friday, rising for a second day after its biggest one day fall for the year on Wednesday.
But Wall Street still ended lower over the week.
The Dow ended up 306.62 points, or 1.2%, to 25,886.01, while the S&P 500 added 41.08 points, or 1.44%, to 2,888.68. The Nasdaq gained 129.38 points, or 1.67%, to 7,895.99
The Dow is now down three weeks in a row fell 401.43 points last week or 1.53%; the S&P 500 index lost 1.03% to be also down three weeks in a row while Nasdaq also lost ground to end off 0.8%.
