Major equity markets have bounced to near-post-crisis highs of late, helped by solid earnings on Wall Street, which sets the tone for global stocks. But headwinds are mounting, as Citywire.co.uk points out, and stocks look set to struggle over the next few months.
One problem is that "the bears have gone into hibernation" in America, and excessive bullishness tend to presage a flat or slightly declining market over the next three months, says Credit Suisse's Andrew Garthwaite.
High oil prices won't help and are lowering corporate profit margins, adds Nomura's Ian Scott. The number of analysts lifting their earnings forecasts for firms across the world has been eclipsed by those lowering them. Downgrades outnumber upgrades for the first time in almost two years.
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Widely-watched lead indicator, the global purchasing managers' index, has also turned down. Seasonal statistics point to a lack-lustre May-September and the end of the Fed's quantitative easing programme may also add to uncertainty. All this, says Citywire, implies a "sombre summer".
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