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It’s rocking in the stock exchanges right now. Last week, most things improved and the tone was positive, but on Monday, December 21, everything changed radically after Britain closed again.
A number of countries subsequently stopped air traffic to and from the UK after reports that the coronavirus mutated there and then spread to other countries.
“Short-term reversal risk”
But the long-term positive trend is unaffected, according to Karl Hedberg, chief equity officer at Carnegie Private Banking, who instead sees the continued pullback as a buying situation. On the short-term perspective, the OMXS30 index is still seen in a downward trend according to technical analysis, with initial support around 1860.
– In the short term, there is a risk that we will have more setbacks during the last trading days of the year. Attention has focused on new closures in Europe and a mutated virus that may be more contagious. The US and Swedish indices traded at record highs during December, making it easier for investors to be cautious and reduce equity risk ahead of the Christmas holidays. So I think there is a risk that we will see a pullback a few more days before the end of the year. However, there is nothing that I think will change the vision of early next year. I think a continued rally should be viewed as a buying situation, says Karl Hedberg, Carnegie Private Banking’s stock manager in an interview on the bank’s website.
No Brexit
He is also not very concerned about the situation in the Brexit negotiations. If the union’s exit is without a contract, Hedberg believes the markets will only be weighed temporarily.
– However, I think the market so far hopes that in the end there will be some kind of agreement. Given the strong stock market sentiment we’ve had recently, I don’t think a non-contractual exit is enough to reverse the long-term positive trend in the market.
