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.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
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".
-
Christmas at Chatsworth: review of The Cavendish Hotel at BaslowMoneyWeek Travel Matthew Partridge gets into the festive spirit at The Cavendish Hotel at Baslow and the Christmas market at Chatsworth
-
Tycoon Truong My Lan on death row over world’s biggest bank fraudProperty tycoon Truong My Lan has been found guilty of a corruption scandal that dwarfs Malaysia’s 1MDB fraud and Sam Bankman-Fried’s crypto scam
