Equity prices recovered on Monday and Tuesday as hopes were raised of a settlement for Greece’s 170 billion euro debt problem. The parties concerned may find a solution to managing the interest payments in the short term. How Greece will ever find a way to repay the capital is a completely different matter. There is more evidence of how fund managers continue to fear for asset prices, in a report by David Oakley in the FT on Tuesday. The CFA UK polled 11,000 investors, and the results of the survey showed that over 60% of those surveyed thought that equity markets were overvalued, and 75% believe there is a bubble in bonds. These believes could suggest that should bonds or equities fall, buyers may not rush in too quickly. On the positive side it may mean that investors have cash on the sidelines looking for opportunities. The much-anticipated switch from bonds to equities has yet to materialise despite bonds year to date having fallen, whilst equities have continued to rise.
Away from the trials of Greece and back to the fundamentals of economic data, the latest Chinese manufacturing report in the form of the HSBC purchasing managers survey came in with a reading of 49.6, slightly above expectation. However at 49.6, the index reading remained below 50, considered the indicative level of an expending manufacturing base. The latest US durable goods orders survey reported by the US census bureau, recorded a fall in orders of 1.8% month on month for May. In contrast the euro area-purchasing manager reports for services, manufacturing and the combined all came in above expectations. These reports suggest a continued improvement in the euro area economy, despite the continued fears for Greece and its impact on the euro. The US data continues to muddy the interest rate debate waters.
A report in Tuesday's FT, drawn from data released last week by the UK government-appointed Social Mobility and Child Poverty Commission, suggested that up to 70pct of job offers in the fund management industry, were made to graduates who had been to a more exclusive form of education. The report suggested, according to the FT, that snobbery about accents and mannerisms was being used to filter out working class candidates in favour of those from more privileged backgrounds. Fund managers interviewed on the subject dismissed the report as a view from a bygone era.
The definition of "poshness" was the subject for debate on the radio the other day as one caller described being posh as buying a bottle of wine on one day and drinking it on another. Rather good we thought.