European stock markets are trading higher today by recovering some of their losses yesterday. Markets have gathered their momentum after another record finish on Wall Street yesterday. The Fed’s tapering concern is becoming less fear for the markets, as the corporate earnings keep on beating the expectations which confirms that the recovery is strong in the US.
However, Mr. Bernanke’s tapering decision is more focused on the economic data and the existing home sales data released yesterday came on a weaker side with the final reading of 5.08M while the forecast was 5.27M. Investors have been taking the advantage of ultra-low interest rates in the US and housing recovering has been extremely strong in the US since the financial crisis.
Investors are also impressed with Beijing’s decision in which they announced that China will fine tune their policies to boost the economic growth which pushed the Asian indices in a positive territory. The country is certainly trying its best to maintain the GDP growth rate of 7.5% for 2013 and these restructuring and fine tuning efforts have surely increased the optimism for risky assets in the European markets, at least for today.
Interestingly enough, the bailout countries which are still struggling with the growth and the debt to GDP growth is also increasing for these countries. The political soap opera is finally winding in the euro zone as Portugal’s PM finally appointed his coalition partner Paulo Portas as his deputy. The PM is hopeful that Mr. Paulo will help him to pass the reform bill for the country’s bailout package which could help to bring the bond yield lower.