After a bumper 2017, will 2018 be kind to the financial markets?


AFTER a bumper year for financial markets in 2017, can 2018 be anything like as good? Much will depend on the global economy. The rally in stockmarkets stretches back almost two years, to the point when worries about an era of “secular stagnation” started to diminish.

The first pieces of economic data to be published in January—the purchasing managers’ indices (PMI) for the manufacturing sector—were pretty upbeat. In the euro zone the index recorded its highest level since the survey began in 1997. China’s PMI was stronger than expected, and America’s index showed new orders at their highest level in nearly 14 years.

The obvious question is whether the markets have anticipated the good news about growth, and pushed share prices to a level from which returns can only be disappointing. The cyclically adjusted price-earnings ratio of the American market, which uses a ten-year average of profits, is 32.4; it has been higher only in September 1929 (just before the Wall Street crash) and…

The Economist: Finance and economics

Post Author: martin

Martin is an enthusiastic programmer, a webdeveloper and a young entrepreneur. He is intereted into computers for a long time. In the age of 10 he has programmed his first website and since then he has been working on web technologies until now. He is the Founder and Editor-in-Chief of BriefNews.eu and PCHealthBoost.info Online Magazines. His colleagues appreciate him as a passionate workhorse, a fan of new technologies, an eternal optimist and a dreamer, but especially the soul of the team for whom he can do anything in the world.

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