Talk of a potential correction has done little to fetter the stock markets with this past two weeks showing more solid gains. However, the bears are starting to make noise and some investors are looking to take profits off the table after stellar returns since March.

The outlook for the graduate job market and the dramatic rise in the number of applications for university places reminds us that we are probably facing a slow recovery in real economic terms. Students are being told to take gap years and come back next year as the total of job opportunities plus university places falls well short of the number of potential applicants. Interestingly, most of those who decided to defer will not feature in any unemployment figures. This is only deferring the problem and young people are likely to find it much more difficult to find work for the next two to three years at least. This will be a drag on the UK economy and a real challenge for the next government.

However, once the economy does turn it implies that recruiters will potentially find a massive source of eager graduates with valuable life
skills learned in their time out.

Michael Page’s interim results didn’t offer much succour for jobseekers either. In the UK, market conditions were weak across all disciplines and regions throughout the whole of the half. UK revenues declined by 32% and gross profit fell by 40.3% versus the same period last year. Michael Page’s shares have fallen on the back of the results. Yet this follows on from an increase of 34% since the start of July. Investors and analysts now seem divided. Michael Page shares are valued on a recovery; however, some analysts now think that much of the growth is already priced in and that the green shoots we talked of a month ago could have been premature. While the rate of decline does seem to have softened in some markets, the City is concerned that we have not yet felt the real force of the recession in mainland Europe, especially in France and Germany, and that Q3 could be tough.

Like the summer weather I would expect the stock market to be volatile and a little unpredictable for the next month or so. The returns since March really have been extraordinary and while the global economy still looks fragile, we may see some profit taking.