Hat-tip to Hamish McRae at The Independent for his excellent piece on underappreciated positives in the UK :
You’d Better Sit Down—Stock Markets Are Doing Rather Well
As he points out, January’s improving manufacturing numbers and narrower deficit suggest Britain ’s economic and fiscal situations are firming up a bit. January’s robust service sector expansion, reported Friday, seems like further evidence of this—services, after all, comprise about two-thirds of the British economy. Granted, one month’s data don’t mean a long-term trend is unfolding, but a strong January is encouraging after Q4 2011’s small GDP contraction.
And, just as important for global equity investors, he mentions some sensible reasons to be optimistic about shares—like strong economic growth in Emerging Markets and the US , which we also think are two factors likely to help equities’ recent momentum continue. And the momentum is even stronger than the article suggests. Not only did global markets rise more than 5% in January, but the MSCI World index is up over 17% since the recent correctional low on October 4, 2011 ( in US dollars, as of market close last week). That fact might make even more people need to sit down!
