If you’re betting that Mario Draghi has put a floor under the US stock market, you might also want to invest in a parachute.
The analogy may be a little dramatic, but Gemma Godfrey, head of investment strategy at Brooks MacDonald tells us that there’s a real reason to worry that Draghi is all talk and no action.
Last week Draghi, the president of the ECB, said he would do ‘whatever it takes’ to preserve the euro.
In turn, that’s generated expectations that Draghi planned to unleash some serious fire power. On the news the stock market surged.
“Now he has to deliver,” says Godfrey
But chatter is growing that when Draghi speaks later this week, what he’ll talk about is more bond purchases – and only bond purchases. If that’s all he says, Godfrey tells us, markets will be disappointed.
Perhaps, very disappointed.