Globalisation is evident in this graphic put together by James Bristow, a global equities portfolio manager at BlackRock. It shows the correlation between the U.S. S&P stock index and counterparts in Europe, Australasia and the Far East.
There is no question that the losses on stock markets at the moment are primarily the result of the Greek crisis. A downgrade of a euro zone country’s sovereign debt to junk is enough to make all but insane mainstream investors take a large step away from risk.
Morgan Stanley has been crunching some numbers about Europe and come up with something that (not surprisingly) fits their scenario of a near-term stock correction but only within a longer-term cyclical bull market for equities. It all comes down to eight days in March, apparently.
Slightly strange data from Deutsche Börse. Its latest survey of what top European executives have been doing shows increasing signs of optimism. That is, management board and supervisory board members and their families have been buying shares in their own companies.
The latest State Street investor confidence index bears some scrutiny. The overall index dropped in February which would seem to be in line with other sentiment indicators such as The Conference Board’s consumer confidence index and the German Ifo on business thinking.
Reuters asset allocation polls for January are out and — perhaps not surprisingly — show global investors cutting back a bit on stocks. That would be expected given that world stocks are heading for a negative month and the likes of emerging markets have had a few days battering.
There is a divisive election ahead for Britain, the threat of a ratings downgrade on its sovereign debt and a deficit that has ballooned into the largest by percentage of any major economy. UK stocks, bonds and sterling, however, are trundling along as if all were well. What gives?