Boom/Gloom Index slips to downturn level

Index Aug10.pngThere was good and bad news from the latest IeC Boom/Gloom Index.

The good news was that the Austerity reading fell quite sharply. Markets have moved on from the Greek crisis. And confidence seems to have been restored, at least temporarily, by the results of the ‘stress tests’ on the major European banks.

But the bad news was that the Index itself fell back to the 4.0 level that described the downturn period in financial markets from November 2008 – April 2009. This is worrying, as most markets staged an impressive rally during July, with the US S&P 500 rising 7%.

However, these rallies took place on low volume. Whereas a strong market should see rising volumes, as new investors join the rally. August’s Index will therefore be critical. If it stays low, then the next stage of the downturn may well be close at hand.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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