Global markets' complacence about economic outlook raises a red flag

EQUITY markets around the world have performed well in the first four months of the year, largely based on the belief that global growth is picking up.

Nowhere is this more evident than on Wall Street, where the major indices have risen to all-time highs as investors bet on generous tax cuts and government spending strengthening the economic recovery while counterbalancing the simultaneous drag from higher interest rates and geopolitical risks.

However, a closer and more sober examination of 2017's stock market rally thus far suggests that much of the buying may have been premature and an over-e…