DAVY VIEW

Economic data from around the globe continue to break records but in the wrong direction and for all the wrong reasons. The latest PMI data for the Eurozone region, the lowest on record, point to a severe recession. EU Commission forecasts concur with this view, indicating a 7.7% fall in the region this year with Irish GDP expected to fall by 8%. In the US, private payrolls fell by over 20m in April, almost double the number of jobs lost in the entire period of the last recession. Despite this, equity markets continue to rally as governments, particularly in developed markets, propose ever-increasing stimulus packages. Current valuation levels need these measures to work.