Sitting pretty – on the edge of a cliff

Analysts have been increasingly commenting on how the stock exchanges have somehow untethered themselves from the economic fundamentals: in the first half of the year the world had to face the impact of the pandemic, which became a story of lockdown and paralysis for key sectors of the economy; but falling interest rates and quantitative easing (central banks buying up government bonds), measures frequently used during the previous economic crisis, have actually resulted in more money flooding onto the market, which in turn has been invested in shares. This can be seen in both the higher turnover on the global stock exchanges (for example, on the WSE, where turnover went up by 34 pct in H1) and in the greater access to finance for equity funds. The fall in many indexes in April and March was made good on the trading floors and for some the ‘pandemic half-year’ ended in the black. That’s precisely what happened in the US, where the Nasdaq grew by 12 pct. The other main