F&C global strategy director Ted Scott has warned that recent events in the US and Europe indicate “all is not well for the global economy”.
Looking over events from the past two days, Scott highlights the unexpected fall in US GDP and the continuing weak economic data in Europe.
He says: “The last two days have been a reminder that all is not well for the global economy.
“The fall in US GDP grabbed the headlines because it was the first negative figure for three years and so far adrift from expectations, but the steady drip of weak economic data in Europe continues. Today, the poor retail sales numbers from Germany as well as figures from two of the largest eurozone banks are a reminder of the challenges ahead.”
In Italy, Scott looks to the uncertainty created by the impending general election for the sharp plunge in the market and the large profit warning received yesterday from a Europe’s largest oil service company.
Scott acknowledges that the vulnerability of the world economy has led to some profit taking after a strong start to the year, however he argues that the “inexorable” rise in the euro reflects that “for the moment the bulls are still strongly in the ascendance”.