St James Place : Done decoupling?

Last week investors had to contend with news that major world bourses were in bear market territory - that is, a fall of at least 20% from peak to trough; such headlines generate understandable unease. Yet the stories of markets and economies in 2016 appear to have largely decoupled.

Markets can sometimes predict crises, of course, but they can also start believing their own narratives all too readily - or simply follow their own momentum. In the end, they tend to catch up with fundamentals. Those global economic fundamentals may not be stellar at the moment, but they are far better than markets had been indicating. As it happened, Thursday and Friday brought some respite.

This week's bulletin also includes:

• A late-week surge enabled several major market indices to deliver the first positive week of 2016
• Oil rose back above $30, but is yet to find the price floor needed to help settle markets
• Global forecasts for 2016 from the IMF put growth in 2016 and 2017 above last year's level
• The ECB hinted at further stimulus to come, while Mark Carney said the UK economy was not ready for a rate rise

View this week's Market Bulletin, which contains thoughts and opinions of St. James's Place and our range of investment managers on the key issues affecting investors.

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