US and European equities recovered on Monday, with the S&P 500 avoiding a bear market and the euro surging after the European Central Bank stated its deposit rate will likely be lifted out of the negative territory by September.
The MSCIMSCI (.MIAPJ0000PUS) was slightly weaker, the all-country world index closed up 1.47% but is still down about 17% from its record high in January.
The rally lifted all 11 S&P 500 sectors and put the benchmark on track for its first week of gains after seven consecutive weekly losses. But many analysts say the downturn in equities is not over.
“The doves are throwing in the towel,” said Holger Schmieding of Berenberg bank, adding that he expects ECB rate hikes of 25 basis points in July, September, and December.
A survey from the Ifo Institute on Monday showed that German business morale unexpectedly rose in May, helping to calm investors for the moment.
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