On paper, UK equities - especially those within the FTSE 100 - should be tearing away right now. The UK economy, despite being a tad lopsided (much too focused on consumer spending and its housing market), is growing strongly.
Recent data from ASDA suggests that UK consumers’ weekly discretionary income is now at a five-year high. Sterling also looks to be in good shape, and the UK stock market boasts a great collection of world class businesses. Yet as soon as we look at the hard numbers, we notice what we might call the Big Bad FTSE 100 Gap – while the S&P 500 benchmark has shot ahead, UK equities have not rebounded to the same extent since the October lows. All the obvious answers are given to explain this discrepancy. The London markets’ beefy exposure to energy and mining stocks is perhaps the biggest ...
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