Well, it was certainly bad while it lasted. Like those mystical 'green shoots', a growing consensus seems to have sprouted in the financial markets that the worst has passed.
Equities have rallied by about 20 per cent from their recent lows. Having spiked sharply higher after the Lehman Brothers collapse, both the Vix index of expected equity market volatility and corporate bond yields appear to be stabilising at somewhat lower levels. Is it finally all over?
Perhaps. As ever in investment markets, clarity is in short supply. What makes me sceptical about the duration and further strength of the equity rally is the degree of hope that accompanies it. Hopefulness may be a good characteristic in presidential nominees, but it makes a lousy bedfellow for investors. Market watchers were admittedly impressed by the G20 in London. And having been previously unable to spot a minefield without gallumphing through it, US Treasury Secretary Tim Geithner has finally found some traction with the euphemistically titled 'Legacy Assets' programme.
No comments:
Post a Comment