Markets struck a note of cautious optimism on Wednesday, with U.S. and European equities rebounding and haven assets declining. The pound extended its gain following the surprise election announcement.
The S&P 500 Index rose while banks lifted the Stoxx Europe600 Index after its biggest loss since November. IBM Corp. tumbled after sales missed estimates, dragging the Dow Jones Industrial Average lower.
Investors seem to be taking the addition of yet another macro risk in stride as the U.K. vote joins a slew of elections to be held this year against a backdrop of rising populism in Europe. Geopolitical tensions continue to simmer over both North Korea and Syria.
“We’re still hugely vulnerable to political risks,” said Christopher Jeffery, asset allocation strategist at Legal & General Investment Management in London. “Polling for the first round of the French election is hugely tight. We have no clear indication of how the drama in North Korea will play out. And those factors are more important to us than the flow of earnings news in the short term.”
Here’s what investors are watching:
The first round of voting in the French election is on Sunday.
The Stoxx Europe 600 increased 0.3 percent.
The yen dropped 0.6 percent to 109.04 per dollar.
The Bloomberg Dollar Spot Index rose 0.4 percent.
Gold declined 0.5 percent to $1,283.42
Source: Bloomberg
Junior Trader Stefan Panteleev
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