Why 'Goldilocks' markets are alive and well

ON UK GROWTH

Goldilocks is alive and well in global markets. Economic growth is improving sufficiently to reassure investors that corporate earnings growth can recover, but is not yet so strong as to cause complacency among policymakers.

But while the UK equity market has performed well in October and is now hitting new highs, investor sentiment still feels surprisingly subdued.  Encouragingly, there seems to be no sense yet of the rampant bullishness that would surely signal an approaching peak. Over the past few months, despite jitters over eventual policy tightening and emerging market turbulence, the underlying economic newsflow has been positive. The UK economy has at last gained some growth traction, and Europe too is showing signs of recovery. Elsewhere, Japan is benefiting from massive reflationary monetary st...