Opinions expressed herein are those of Brett Ewing and S. Lance Mitchell and do not represent those of Centaurus Financial, Inc.
Draghi Fires Expected Bazooka Volley, Markets Sell the News
- European Markets have ran up almost 10% in the past month
- After ECB President Mario Draghi detailed the much anticipated rollout of new QE and more negative interest rates the markets shot up and then reversed into negative territory in classic “sell the news” fashion
- Media will be quick to point out that because of the negative moves that the market didn’t like the action & that somehow Darghi didn’t do enough or that he did too little
- We continue to believe that sentiment is very much skewed to the negative side & that market participants are too quick on the sell trigger
- Market has showed surprising strength even through this negative sentiment which is very bullish in the near term
- Discounting the moves in stocks, bonds, & commodities in the past month for a “sell the news” move in a day is likely the wrong move and any short term dips should likely be bought as the ECB policy move is likely a longer term positive for liquidity concerns that had been ruling the market & preventing risk taking
- Providing the FED continues to hold off on rate hikes & market sentiment continues to be skewed heavily to the negative side, risk assets should be bought
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