Against the Grain

The recent market upsurge has been accredited to a realisation as Bloomberg headlined last week “US Avoids Recession as Data Can’t Get Much Worse”, roughly translated, the economy is not going into double dip. But who said the economy was entering that condition, the majority of analysts see the chance of such an eventuality as 25%. Putting the probability of positive growth at 75%. The question then becomes what speed? If the expectation is optimal US GDP of 3%+  and world growth over 4%, then the recent rally is understand however, if over the next two years growth is sub optimal then prices have overshot. This raises a disconnect, economies has many speeds while the market machine has two, risk on / risk off.

The Asian markets added the premium for the late DJI surge then looked around for direction. Into London markets were still looking, LME stocks routine with fall dominated by al and sn the only riser. Looking at the Select volume seems London took time out as well. Normal business resume again tomorrow. On the equity front FTSE rose 11 points.

The Spt Euroland Sentix investor confidence index slipped to 7.6 against and expect rise (Aug 8.2).