Four reasons it is not all about Europe

IT IS NOT ALL ABOUT EUROPE

The market low seen in early October did not represent the capitulation of sentiment sought by contrarian investors as a true market turning point, but there was plenty to suggest that bearishness was exaggerated.

1) Fears of a US recession were partly the result of disappointing data, partly of the assumption that the market sell-off in August was a leading economic indicator. However, broad money supply and bank lending to businesses have been growing steadily since early 2010, both important pre-conditions for growth. Business and consumer surveys were gloomy but hard economic data much less so. It should have been no surprise that third quarter annualised growth has been estimated at 2.5%, with more expected in the fourth quarter. While economic prospects in the distressed countries of the ...