By: Dr. Mike Campbell
In what is clearly a twitchy and nervous global market, stocks have been regaining some of the ground that they lost on the back of the sovereign debt crisis with its focus on the Euro. The recovery took a set back on Wednesday, losing momentum in America, on the news that the Chinese were reconsidering their Euro debt.
However, as we predicted yesterday, the Chinese have given the currency a vote of confidence, simply by saying that they are not rethinking their position on the Euro. That was enough to allow the markets to resume their upwards impetus. The major markets all closed higher with gains ranging from 2.8 to 3.7% in yesterday’s trading session. The markets are still down substantially compared to where they were at the start of the month, but sentiment seems to be improving for the time being, at any rate.
In a tale of contrasting fortunes, two major economies on either side of the Atlantic posted revised growth figures for Q1 recently. The world’s largest economy downgraded its growth figures for the quarter from 3.2% to 3% (on an annualised basis). The figures for both consumer and industry spending were both adjusted downwards accounting for the decline. US unemployment also rose from 9.7 to 9.9% in April over the previous months figures.
In the UK, growth for Q1 was revised upwards from 0.2 to 0.3% on the basis than stronger than predicted performance in the industrial production and business services sectors. It remains to be seen if the recent change of government in the UK to a Conservative/Liberal Democrat coalition will have an impact on business and consumer confidence.