Jim Armitage: Yes, things are looking up, but there's still a long way to go

The markets have had one of their better weeks. Yesterday saw the FTSE 100 close 2.66 per cent up from Monday's start point, two big takeover deals trundled into London and, to top it all, Wall Street's golden boy Jamie Dimon, head of JPMorgan, declared that he sees green shoots all over America.

Make no mistake, it was a good day for bankers. Dimon steered his investment banking division ("casino" division if you're that way inclined) to far greater heights than most expected. Trading revenues were up 18% and overall profits for the bank were up 31%.

And, whether or not you believe corporate takeovers are good for the economy, they are, in normal times at least, a strong indicator of confidence. So to have two big deals in a day inevitably led to talk that the end was nigh for the drought of City deals.

But is it really? Certainly, there are arguments that say "yes": debt is cheap and easy to come by for big potential bidders, corporate balance sheets are full to the brim and the global economy is in better shape than a year ago. Share prices have fallen from their recent highs and the pound is weak, making our stock market-quoted companies look affordable to predators.

However, there are as many reasons to be fearful as greedy. Do you really buy that the world economy is on the mend when China's growth is slowing, the Eurozone remains a mess and every market under the sun gyrates wildly whenever those dread letters "Q" and "E" are mentioned together? Many shareholders don't. They would prefer the chief executives of the companies they own to refrain from taking big risks on takeovers until there is real long term clarity that the economy is fixed. Give our money back to us, don't waste it on acquisitions, they say.

Shareholders are a cautious bunch, and rightly so. To use the jargon of the investment bankers, this is still a "risk-off" market. Expect a trickle of deals, sure, but not a flood.