Macroscope | Suddenly, the US bull market isn’t looking so great
- Stock prices have been a powerful support for the Make America Great Again agenda because the US market is so big as to be the tail wagging the dog
- Close attention must be paid to the recent market stumble and America’s slowing GDP growth – where US stock prices go, so goes the global economy
What’s more, this is happening at a time when the image of China – the world’s second-largest economy – as a hobbled giant is undergoing a positive reappraisal, which has implications for the global balance of economic power.
I am not alone in this view. My former Far Eastern Economic Review colleague Christopher Wood (now the global head of equity strategy at investment bank Jefferies) observed in a note to clients that the financial media continue to focus on the “endless chatter” around the US Federal Reserve.
Yet this pales into insignificance compared with the “tectonic shifts” happening in geopolitics. Financial markets, Wood suggested, are useless when it comes to discounting such shifts – until, that is, they become impossible to ignore.
I cannot but agree and, even within a more restricted framework of reference, many analysts have been found wanting lately on economics and financial developments.
