Global activity data have softened recently, especially in the US, which had previously been the one obviously bright spot in a generally bleak landscape. The US employment report for March was weak across the board, and the latest batch of business surveys suggests that the strong momentum which was apparent in the early part of the year has dissipated. Meanwhile, although China is expanding again, the eurozone has failed to maintain the signs of stabilisation which were visible earlier in the year. Even the German economy seems to be stalling, which could prove pivotal.
The American stockmarket not yet paid much attention to the weaker data, though global equities are actually no higher than the levels reached at the end of January. The next major leg up in equities may need to wait until it becomes clear whether the world economy is simply suffering from another of the mid year weak patches which have characterised the past 3 years, or is suffering from something more serious this time. Read more