Why there is still room for optimism

ON EUROPE

Despite a torrent of disappointing economic newsflow, investors should not get caught up in the collective panic, writes JOHCM's Paul Wild.

Since May there has been an increase in disappointing economic newsflow, from a lacklustre Q2 GDP figure in the US to weaker purchasing manager surveys across the globe. At the margin, GDP estimates are being reduced and there has been a slowdown in global growth over the past few months. At the corporate level, Q2 earnings has been marked by weaker profit numbers from the cyclical industrials and basic materials sectors, although these sectors had exhibited earnings strength longer through the cycle than might be expected. Nevertheless, it does seem market leadership has changed, as ...