Fiercely burning or slowly simmering? US and Europe’s contrasting economic recoveries
US economy is recovering rapidly while Europe is taking longer, but what does that mean for investors?
In the depths of the pandemic disruption, there was plenty of discussion about the shape of the recovery: U? V? W? K? Today, it is possible to put some tangible data around that recovery as the vaccine rolls out and economies unlock. What can be said about the type of recovery that has materialised?
In the US, certainly, the recovery appears materially stronger than anyone initially anticipated. Retail sales, services and manufacturing data all point to a booming economy. The most recent set of IHS Markit US Services PMI data showed a reading of 64.7 at the start of the second quarter, up from 60.4 in March (50 indicates expansion).
Has the UK equity income ‘dash for trash’ run its course?
By Cherry Reynard, 4 May 21
Although the majority have done well, not every UK equity income fund has benefitted equally
After a dismal few years, it’s been a better time for UK equity income in the last few months. It has outpaced other regions and other approaches, with many funds benefiting from the ‘value’ revival. For battle-scarred investors, the question is whether this strength can continue and if so, which type of equity income funds might lead the way.
Why the S&P 500 is still treading water despite strong company results
An astonishing earnings season for US corporates has not had much impact on share prices
By almost any measure, this has been an astonishing earnings season for US corporates. At the time of writing, around two-thirds of companies had beaten expectations – and not just by a little. Barclays analysts put average earnings per share growth at an impressive 63%. However, it doesn’t appear to be having much impact on share prices. Why?
Tesla is a case in point: its earnings rose to 93 cents per share, against expectations of 79 cents with revenue up 79% year on year. Its share price dropped 3% in the immediate aftermath of the results. Overall, the S&P 500 has been treading water even as results have come through strongly.
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