Investor sentiment is still skyrocketing as U.S. President Donald Trump continues his victory lap and investors revel in the fanfare.
The markets are behaving as though the White House's as-yet undetailed economic policies will cure all ails from the simmering uncertainty around French, Dutch and German elections to the biggest pain for CEO's - technology disruption. The C-suite is using toppy stock prices to lob deals, which must surely demonstrate a sign of confidence.
But what if some of the cleverest minds in the world are pursuing deals and investment out of fear and necessity rather than confidence and companies are really just building Noah's ark before the storm? It leaves me pondering: Is scale the only way to survive the next decade and should investors play markets by riding a wave of mergers and acquisitions?
It's undeniable that global sentiment is growing in a complete reversal from the financial crisis malaise, when the euro zone moved at a snail's pace with no hint of inflation, while the U.S. hunted for ever-elusive escape velocity for its economy. The Philadelphia Fed Index last week surged to 43.3 from 23.6 in January, the highest level since 1984, signalling roaring animal spirits. Meanwhile, here in Europe, the conservative Lloyds Private Bank investment sentiment index climbed to its highest since April 2016.
Investors last week also chased U.S. stocks to record highs. Some would argue it's all related to Trump but what happened to the discount for risk? Populist politics are creating significant uncertainty for the C-suite, not to mention the threat of technology disruption to traditional business models.