Regional differences open up as markets continue to march higher

Indicators of global economic growth have held steady, but with some regional differences opening up. In particular, there’s been substantial improvement in UK and Eurozone data after a prolonged period of stagnation and underperformance compared to continued strong growth in the US. Meanwhile, forward-looking US data has been a little weaker, with some indication that middle-class consumers are finally starting to be pinched by higher interest rates, higher prices and a slow pace of job and wage growth.  

Yet – and this is good news for investors – more companies than usual have beating expectations for earnings growth over the past quarter’s reporting season across the US and Europe. This has provided support for ongoing gains in stock prices, particularly in the US where the likelihood of fewer interest rate cuts this year has dented valuations.  

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