So the last few weeks have seen the markets correcting after a rally which has been quite interesting due to the divergence between leading indicators and market performance. From a global macro perspective the world economy is looking in better shape given the ISM figures in China and the U.S were better than expected. In addition the Non-Farm Payrolls data also beat expectations with the slight disappointment in the unemployment rate ticking up slightly but still below the political headline figure of 8%. Consumer confidence in the U.S. has also picked up in the last quarter indicating retail spending is on the increase whilst housing starts and building permits have also been increasing on a month by month basis which has added to positive sentiment going into the Christmas season. Also looking forward to the U.S. elections to see the result of the Obama/Romney presidential race. There could be a situation unfolding where Obama wins but Republicans dominate congress. Therefore the risk of the fiscal cliff becomes slightly greater and could contribute to a slowdown in GDP growth for 2013. Lets see how the scenario unravels!
