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Journalism of Courage
The world markets send out mixed signals but there may be more reason for hope
The last week was a curious one for the world economy as every indicator sent out both negative and positive signals. For investors,this makes things look unpredictable and treacherous,even as,at the beginning of a new week,no new risks can be identified on the global horizon. Instead,there is room for cheer,given that emerging markets like India have begun to show strong positive vibes,while in Europe speculation around Spain is largely positive it is seen to be on course for a bailout,which means it is likely to accept the freezing of pensions and the raising of retirement age. But late on Friday,Germany said it did not think Madrid needed any further support at this point,spooking the currency markets again.
For the global economy,the signs of stabilisation will be in the third quarter report cards for companies,due from early October,and they will also depend on how the new tensions in the Middle East impact oil prices. Thomson Reuters data shows the outlook for the top 500 companies is at its most negative since 2001,yet that is countered by macro economy numbers for US GDP growth,housing markets and consumer spends,all of which have shed more red than at any time in the recent past. September is still the month that has produced some of the most critical episodes in the world economy since 2008. Not surprisingly,no one is willing to bet that this month might also be the one when the economic order turned the corner.
