Monthly Market Report - May 2017

20th April 2017

With commentary from David Stevenson

On initial inspection everything within the strange world of investment looks really rather optimistic. Most key economic indicators suggest acceleration in global growth, even in the manufacturing sector. Crucially this optimism is evenly spread about, with the Eurozone and China both looking like they might be slowly catching up with the recent pace of growth on display in the US. A good summary of this cheery world view comes via a recent note from analysts at Barclays who run their own macro measures looking at confidence levels, especially in manufacturing. It’s been edging up steadily for the last three months although the very latest measure in March did edge down slightly. Overall though this index still remains at an elevated level historically, with the most recent reading the second highest since May 2011. The Barclay’s analysts observe that manufacturing sentiment continues to be underpinned by "buoyant demand - both domestic and external. …global manufacturing sentiment remains solid at the end of Q1” although cost concerns are beginning to build. So, all in all then a decent picture emerges from this one survey. Yet after a bullish few months stock markets have stopped bounding forward, with the FTSE 100 becalmed well below the symbolic 7500 level while the benchmark US index, the S&P 500, also appears to be stuck below the 2500 level.  We are, one suspects, at one of those key inflection points in which the next move up or down will likely set the tone for markets over the next 12 months. 

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