The loose but growing collection of pundits, academics and thinktank operatives who endorse this stubbornly cheerful, handbasket-free account of our situation have occasionally been labelled “the New Optimists”, a name intended to evoke the rebellious scepticism of the New Atheists led by Richard Dawkins, Daniel Dennett and Sam Harris. And from their perspective, our prevailing mood of despair is irrational, and frankly a bit self-indulgent. They argue that it says more about us than it does about how things really are – illustrating a certain tendency toward collective self-flagellation, and an unwillingness to believe in the power of human ingenuity. And that it is best explained as the result of various psychological biases that served a purpose on the prehistoric savannah – but now, in a media-saturated era, constantly mislead us.

“Once upon a time, it was of great survival value to be worried about everything that could go wrong,” says Johan Norberg, a Swedish historian and self-declared New Optimist whose book Progress: Ten Reasons to Look Forward to the Future was published just before Trump won the presidency last year. This is what makes bad news especially compelling: in our evolutionary past, it was a very good thing that your attention could be easily seized by negative information, since it might well indicate an imminent risk to your own survival. (The cave-dweller who always assumed there was a lion behind the next rock would usually be wrong – but he’d be much more likely to survive and reproduce than one who always assumed the opposite.) But that was all before newspapers, television and the internet: in these hyper-connected times, our addiction to bad news just leads us to vacuum up depressing or enraging stories from across the globe, whether they threaten us or not, and therefore to conclude that things are much worse than they are.

Really good news, on the other hand, can be a lot harder to spot – partly because it tends to occur gradually. Max Roser, an Oxford economist who spreads the New Optimist gospel via his Twitter feed, pointed out recently that a newspaper could legitimately have run the headline “NUMBER OF PEOPLE IN EXTREME POVERTY FELL BY 137,000 SINCE YESTERDAY” every day for the last 25 years. But none would have done so, because predictable daily events, by definition, aren’t newsworthy. And you’ll rarely see a headline about a bad event that failed to occur. But surely any judicious assessment of our situation ought to take into account all the wars, pandemics and natural disasters that might hypothetically have happened but didn’t?

Eoin Treacy's view

After a wonderful meal of sea bass, mixed greens and tofu in China’s gastronomic capital it’s easy to view the world from a glass half full perspective. It is also worth considering that from an investor’s perspective adopting a cautiously optimistic attitude pays off more often than not. 

That doesn’t mean we ignore threats as they develop and it is always important to remain vigilant for topping activity but, in between, giving the benefit of the doubt to the upside is the most profitable course of action.  

That is particularly true following a meaningful correction, when valuations improve, central banks have become more accommodative and the vast majority of investors are exhibiting fear and apprehension. It is when the optimistic attitude is no longer contrarian that we need to be particularly vigilant. 

Therefore, reversions back to the mean in the course of a consistent trend are usually buying opportunities, while clear overextensions or accelerations represent future sources of corrections. That’s particularly relevant for the Nasdaq-100 where many large cap shares are so overextended relative to their respective trend means. 

Yesterday, the Nasdaq-100 posted a downside key reversal, but the key to key, so to speak, is size and the Index closed well off its low. The psychological 6000 level represents at least a short-term area of resistance and downside follow through next week would be required to signal more than a short-term pause in this area. 

Meanwhile the Dow Jones Industrials rallied to a new all-time high yesterday but was softer today. Clicking through the constituents of the Autonomies section of the Chart Library the outperformance of old world shares versus technology is striking. P&G, Coca Cola, Starbucks, Boeing all rallied impressively yesterday while Amazon, Apple, Google and Tesla all pulled back. That suggests the rotation which began in June remains underway.