Equity futures and Asian stocks have regained some ground as investors await commentary from Federal Reserve Chair Jerome Powell later Tuesday.
Still, most Alpha generators keep things on a very short leash, fearing getting whacked with an ultimate damp squib in the form of a Hawkish Jay.
Since I'm back full-time trading again, this is perhaps where I lack an analyst's creative imagination -- I still struggle to see the case for a big move in either direction from the current level of S&P, which, it should be noted, is at the dead midpoint of last year's range. Indeed this is okay news; however, if the S&P 500 tape trades flat, Europe can still outperform.
Nothing is safe on a significant US drawdown, and despite the EU's merits of better growth, the continent always gets bossed by the US dollar. In the US recessionary scenario, the US dollar would benefit from a 'risk off' episode, which may result in Europe underperforming, mainly in the US $ terms.
But even if the US tape remains flat, Europe can thrive given low gas prices and a more robust beta to the China reopening. But the missing ingredient right now to green light Stoxx600 higher is a stronger EURO which would confirm not only do investors believe in the global recovery on track but that the US economy will skirt a recession