Overall it has been behaving really rather well and is back within a whisker of its all-time high. Shares received a modest fillip from the news that wages are once again rising faster than inflation. Aside from the fact that this takes some pressure off hard-pressed consumers, it also makes a further interest rate rise from the Bank of England a little more likely. Sterling, which has been under pressure recently, perked up as a result.
There has been little in the way of hard news around as we approach summer. Economic data is thin on the ground and, while there have been some companies reporting results recently, nothing much has emerged to attract investor attention. Geo-political issues are creating something of a two way pull, with good news from North Korea counter balanced by a deteriorating situation in the Middle East. But the threat of the Singapore summit between Trump and Kim Jong Un being called off reminds us that matters are far from settled on the Korean peninsula, while Russia remains something of a wild card.
Of course, the Brexit debate continues to rumble on in the background. With less than a year to go before we officially leave the European Union there remains considerable uncertainty over the nature of our departure or even whether the government will be able to secure parliamentary approval. Scotland has also thrown its own little spanner into the works, while the divisions in the Conservative ranks over what the future customs arrangements might look like simply adds to the confusion. This particular issue retains the ability to upset confidence.
But investors, no doubt encouraged by an uplift in merger and acquisition activity, presently seem capable of shrugging aside such potential problems. Even higher interest rates and thus more expensive borrowing costs seem to have dropped out of investment thinking for the time being. But bond yields are on their way up across the Atlantic, which may be providing a steer for what we might have in store in the months and years ahead. Let us all hope current confidence is not misplaced and that we can enjoy both clement weather and buoyant markets for the summer.
