A year ago today, the UK index hit what turned out to be its pandemic low. Here's the outlook now.
One year after global markets hit pandemic lows, the recovery has been swift and powerful.
Following a heady combination of fiscal and monetary stimulus, the discovery and rollout of a vaccine and improving corporate prospects, investors have been richly rewarded for their patience.
Since March 23 2020, both the Dow Jones and the S&P 500 have added 76%, the Nasdaq 95% and the FTSE 100 index 35%.
The current concerns on inflation have again temporarily taken a back seat as bond yields declined, sending the recent rotation into reverse to the benefit of growth stocks. A congressional appearance from the Federal Reserve Chair and Treasury Secretary is expected to provide further colour on monetary thinking in terms of interest rates and spending plans on the likes of infrastructure.
Aside from inflation and interest rates, there has been a reminder that the tensions between the US and China have not subsided, with further mutual sanctions underlining the brittle relationship.
Even so, there is increasing evidence of a blossoming global economic recovery which is likely to be powered initially from the US, where the main indices continue their progress. The tide of improving sentiment is lifting all boats and in the year to date, the Dow has added 6.9%, the S&P 500 4.9% and the Nasdaq 3.8%.
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In the UK, the pace of growth this year has been rather more sedate, although the FTSE 100 remains ahead by 3.3%. On valuation grounds alone, there is evidence that the index is at multi-decade lows compared to other global indices, which has increasingly caught the attention of institutional investors seeking fresh value opportunities.
In turn, the nature of the index, with its prevalence of mature, cyclical industries, could yet turn into an attraction as opposed to the drag it has been of late as investors previously sought high growth, technology-driven movers. The more recent rotation remains in its early stages but the potential is clear to see as economies generally feel the positive force of a return to some sort of normality.
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