Global stocks rose on Tuesday as European Union leaders reached a breakthrough agreement on a "shiny" $860 billion recovery fund.Futures tied to the S&P 500 rose 0.7% following tech stocks leading the market higher on Monday.
Bank of America analysts said the EU fund does not "move the needle enough for the macro given the size of the shock."Global stocks surged on Tuesday as investors were relieved by the European Union's sanction of a 750 billion euro Germany's DAX index led markets by rising 1.7%, while the pan-continental Euro Stoxx 50 gained 1.5%.
The recovery deal did not come without compromises as EU leaders modified the original structure by agreeing on a distribution of 390 billion euros in grants and 360 billion in loans. Its original composition, which was disputed by the so-called "Frugal Four" nations, was set at 500 billion euros in grants and 250 billion in loans.While different to the original proposed fund, the package is a welcome relief after days of squabbling between EU leaders, SpreadEx analyst Connor Campbell said in an email.However, analysts at Bank of America said the fresh stimulus does not "move the needle enough for the macro given the size of the shock.
"The recovery fund is a recovery tool — we still lack a proper cyclical/stabilisation tool and national governments are left to deal with that on their own," the analysts wrote in a note.from AstraZeneca and Oxford University's COVID-19 vaccine trial data.
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