Markets started the month in bullish mood gaining on the momentum from the upward surge in September and October.
There have been definite signs of economic improvement in the USA and UK whilst in Germany economic growth has been very strong.
In the Far East concerns over interest rate policy in China has made the Chinese domestic market volatile to say the least with 5% daily swings in both directions.
Just as everything appeared to be improving the European zone revisited the sovereign debt problems created by the financial crisis in 2008. The debt parcel landed firmly in the Irish governments hands as refinancing Irish banks speculative property lending proved a problem.
The result is a massive EU rescue package has been announced in an attempt to shore up confidence in the Irish financial system.
Portugal and Spain have similar problems and the Euro is taking the brunt of these concerns.
Stockmarkets love an excuse to have some volatility and duly obliged with most markets falling sharply during the “uncertainty”.
As expected they have decided to recover very quickly over the last two trading sessions as more positive economic data surfaces.
No doubt this volatility will resurface as the next round of refinancing looms for the different European states and the market speculates on the outcome.
In the mean time lets hope for a continued year end rally as fund managers look to next year’s gains.
