9th May 2012
BlackRock: Global Market Analysis
Last week was particularly poor for equities; the S&P 500 for example fell by over 2%, recording its worst weekly performance this calendar year. This decline was led by uncertainty over the European elections at the weekend and a very weak jobs number from the US on Friday.
It is fair to say that the economic climate has changed in recent weeks, with mixed data pointing to a weaker macroeconomic backdrop than earlier in the year and momentum slowing worldwide. It is, though, a different story for corporate earnings. Corporate profitability relative to expectations remains pretty strong.
In addition to this relative strength there are a number of factors at play which are supportive of global growth. These include the global easing cycle, improving US housing dynamics and China's policy switch. The combination of these factors means we are unlikely to see anything like as dramatic a slowdown in economic activity as we saw towards the end of 2011. In turn this means that central banks, while remaining committed to supporting economic activity, are unlikely to introduce anything new and aggressive into the policy mix.
Focus on Fixed Income
Update on the fixed income landscape covering government and corporate bonds and currency moves.
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Precious Metals Update
Gold prices were pushed lower this week following the release of better-than-expected US manufacturing numbers, which reduced the likelihood of further monetary easing.
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Latest report – China
The BlackRock Investment Institute examine the crossroads at which China finds itself in "Braking China without Breaking the World".
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