Things have been pretty quiet of late and so my blogging on the economy has become somewhat dilatory. This afternoons Phialdelphia Fed Index did however shake my complacency as it shows that manufacturing is still very weak. It seems that while the rate of economic contraction is slowing there is little to signify that an upturn is yet underway. World trade is now down some 18% since September - a shocking number when you think about it.
Why the S&P is trading on 17x when the historical average is 16x remains a mystery to me. Despite huge injections of stimulus economic growth in the US,Asia and the US remains decidedly lacklustre. What corporate bright spots there are seem to be related to short term re-stocking leaving the longer term question of where demand will come from unanswered.
Naturally, with equity markets discounting a sharp recovery in earnings ( something I think most unlikely ) the delayed new issue schedule is opening up again. Russia seems to be in the lead - although which institutions will be keen to add to positions in a country where corporate governance is so 'light touch' remains to be seen.