Colin McLean: Market contradictions mean risk is increasing

MACROECONOMIC FOCUS

Bonds and shares are usually in conflict but their current synchronicity is not a reason for investors to be complacent, says SVM's Colin McLean

Stock market behaviour is at its most contradictory for some time – markets are going up, but bank shares are lagging. Bonds and shares are usually in conflict, but now are rising together, even though each signals a different outlook for the global economy. However, investors seem to be displaying an unusual degree of complacency. Perhaps the most concerning anomaly is the recent weak performance of many large banks. Profitability in this area has fallen sharply in the third quarter. And, banks are now raising more money from investors, despite all the reassurance that has been given...