From the Fleet Street Letter (GBR) –
The market chaos that began last August has passed for the time being. There can be little doubt that it’s return, at some point, is inevitable. That panic will reassert itself when there’s something new to worry about.
The Chinese slowdown is old news; the market has adjusted to it. The authorities have told us they’ll support the currency and maintain growth at 6.5% courtesy of further borrowing. The problem has been pushed into the future for the time being. In the meantime, China will grow at 6.5% because the government says so. That’s the benefit of a command economy. Despite that, whenever the renminbi falls, markets wobble, which isn’t a particularly solid foundation for this rally to continue.
European stimulus has put a halt to the slide in corporate bonds. It’s not the solution I’m comfortable with but it’s there. Bomb attacks in Istanbul and Brussels, tragic though they may be, haven’t stood in the way of the market’s progress. We’ll come back to market conditions later when I discuss whether we are looking at a bull or bear market in equities.
I’ve had some interesting questions from readers and have selected a few that highlight some of the key concerns you face.