Euro Stoxx
Looking at the Euro Stoxx over the last 30 years between December 14 and January 01 you can see that gains have been the order of the day. To be precise there have been 27 years of gains and only 6 years of losses. The greatest loss was in 1990 with a -5.6% drop. Can any reader remember why? It was before my time in the finance world. The largest gain was in 1998 with a whopping +16.35% profit.
So, based on the balance of probabilities we would favour more upside this year during this time. The factors in favour are:
- Global optimism on vaccine hopes
- Return to growth expected next year
- Plenty of European stimulus
The factors against are:
- Any rising COVID-19 cases
- Slow down in European growth.
However, the irony here is that if the situation for Europe gets worse then the upside for Euro Stoxx looks better.Why? It just means more stimulus. So, is this a great time to buy Euro Stoxx 50?
I have heard lots of people say that 'this year is different' in terms of the Santa Rally, but few reasons why it is actually different. Surely the vaccine prompts flows out of bonds into equities. That should be enough of a reason for buyers on the dips ne'st pas?
