A relief rally for risk assets — but does it have legs?

Isthe “everything rally” a lasting bull market or a flash in the pan? Investors rushed into stocks, bonds, gold, and crypto assets in December as markets were flooded with bets that the Federal Reserve could start lowering interest rates. But Wall Street is divided over whether the “everything rally” represents a bull market or just a “fleeting sugar high” from the end of the tightening cycle, writes the Wall Street Journal.

Analysts agree that the tightening cycle is over — but when will it pivot? Economists don’t expect the Fed to start cutting rates until at least July 2024, with the majority of participants forecasting a rate trim of only half a percentage point of less in 2024, from its current 22-year high of 5.25-5.5%, a recent Financial Times poll showed.

IN GLOBAL MARKETS- India has overtaken Hong Kong to become the world’s seventh-largest stock market by market capitalization as “optimism grows” about the country’s economy, CNBC reports.

THE CLOSING BELL-

The DFM fell 0.4% yesterday on turnover of AED 349.08 mn. The index is up 17.4% YTD.

In the green: Emirates Reem Investments Company (+6.7%), Aramex (+5.1%) and Takaful Emarat (+4.2%).

In the red: International Financial Advisors K.S.C.C. (-9.8%), Dubai Islamic Ins. and Reins. (-4.9%) and National Central Cooling Co. (-3.3%).

The ADX fell 0.1% yesterday on turnover of AED 982.96 mn. The index is down 7.8% YTD.