2012: The story so far
That apparent stagnation doesn't even begin to tell the story of the last turbulent six months, and at the same time, it does. Stock markets and investors have been all over the place, yet gone nowhere.
That was the six months that was
The year began with investors gloomily reaching for their whisky bottles and loaded revolvers. Then suddenly the suicidal mood switched to celebration.
The European Central Bank's long-term refinancing operation (LTRO) had markets shooting the lights out rather than shooting themselves in the foot, or head, or wherever... and the euphoria had bullish investors wondering "what will I do when the FTSE hits 6000?" We came close to finding out, with the FTSE 100 closing at 5,965 on 16 March.
LTRO sparked a banking stocks revival -- one week after I sold mine(!) -- with Barclays (LSE: BARC) shooting up from £1.76 to £2.57, a rise of nearly 50% in just two months. Lloyds and Royal Bank of Scotland also rebounded.
It couldn't last and it didn't.
Super Mario Brothers
I've lost track of how many EU rescue packages we've had in recent years -- as I write this, European markets are surging on the news that Germany has been bullied into recapitalising Spanish and Italian banks, a double strike that Mario Balotelli would have been proud of.
How long will that fool markets? Will the recovery make it beyond the end of this sentence? On recent form, no.
Reborn in the USA
That January and February surge wasn't all about the LTRO fix. It was also about US data, with jobs and GDP growth suggesting the world's biggest economy might even drag us all out of danger.
At least one Western country was getting its act together.
Or so we thought.
To LTRO and back
And then it all went wrong. That ECB liquidity dried up. The US stopped producing happy jobs and GDP numbers. The UK sank into a double-dip recession. Chinese exports fell. The Greek tragedy deepened. Spain and Italy threatened to quit the stage.
By June, the FTSE 100 had forgotten all about 6,000 and investors were wondering what they were going to do when it hit 5,000 instead.
Only Germany stood strong.
Then last week, the eurozone's export powerhouse saw its PMI manufacturing data fall to a 36-week low. As football fans discovered on Thursday night, sometimes you really can write off the Germans.
The joy of six
So should investors write off 2012 altogether? With six months to go, there are still reasons to be cheerful. Companies are sitting astride a cash mountain. The oil price is falling. The euro hasn't brought down the global economy -- yet. The share price apocalypse has been postponed. Again. China is easing its fiscal and monetary policy. The US is still a hotbed of innovation. You can never really write off the Germans.
Plus there is always the chance of another rebound rally if central bankers launch a concerted bout of quantitative easing, led by a QE3 blitz from the Federal Reserve.
The long haul
I suspect the next six months will rather like the last six. More scaremongering (watch out for that US fiscal cliff!). More phoney eurozone bailouts. More talk of a Chinese hard landing.
Not to mention more banking scandals. Scandal-struck Barclays is now trading at a lowly £1.64, down nearly 7% on the year (I'm glad I sold it now).
We could also be in for a grey and damp company reporting season.
Foolish, long-term investors won't worry too much. Not with Aviva yielding 10%, AstraZeneca on a price-to-earnings ratio of 5.9x earnings, BAE Systems on 6.9x, or engineering company Weir Group down nearly 50% since February.
Wisely, they will be looking far beyond 2012.
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