The Worldwide wobble

According to an article published to The Economist, 2014 is going to be a tough year for the global economy. The performance in 2013 was very impressive, however people are skeptical that it can be repeated. One of the reasons why the first two months of 2014 have been so average is because investors are trying to cash out on the high stock prices that the market ended with in 2013. They are taking the money and running because most experts don’t believe that it will last. Written on February 8, the article explains that “American share prices, in particular, were beginning to look too high: the S&P finished 2013 at a multiple of 25 times ten-year earnings, well above the historical average of 16”. However we aren’t doomed just yet. One point that the author wants to make clear is that economists and experts alike have a pretty poor track record when it comes to predicting sudden shifts in the global economy. Another reason why investors are scared of 2014 is because of China’s slowing growth. Factory activity is at a six month low. It doesn’t take a specialist to understand that when the world’s most productive manufacturer is slowing then there will probably be a negative consequence that can be seen in the global economy. There is a large amount of uncertainty for the future but at this point, all we can do is be optimistic.

http://www.economist.com/news/leaders/21595900-world-economy-will-have-bumpy-2014-recovery-not-yet-risk-worldwide