The major economies are now characterised by desynchronised economic cycles, with divergent policy regimes. This complicates the equity investment decision. Europe may be a relative winner, but too much of the globe is seeing financial conditions tighten, against lacklustre growth, to be optimistic on directional trends. We see downside risk through the opening months of 2016. The European economy is moving in the right direction and further ECB action promises…
James Alexander via Historinhas | Every time I see the chart for US unemployment these days it looks like it is time for the trend to turn.
Caixin | The Communist Party’s 18th Central Committee released a proposal for a major economic development plan on October 29 at the end of a four-day plenum, the fifth time the body has met. In the proposal, the party notes that China still has a lot of room to grow, even though it is facing an array of challenges stemming from shifts in the domestic economy and uncertainty abroad.
There is a definite clash between investors and economists over the US economy. According to Intermoney’s Spanish analysts, markets are looking for reasons to take apart the thesis about the country’s resilient activity, arguing that moderate growth is insufficient. Then there are the economic purists, including many Fed members, who are confident the US recovery is sustainable.
Benjamin Cole via Historinhas | Motor vehicle sales are booming in the United States, up 10% in the last year, and double since the Great Recession. Thanks to blogger Kevin Erdmann of Idiosyncratic Whisk, we have a better understanding of inflation in the U.S. and the role that ubiquitous local property zoning plays in suffocating supply, and thus boosting price.
The Federal Reserve Board released an updated version of its large-scale model on the US economy that may hold clues into why policy makers pivoted at their meeting earlier this week toward a December interest-rate increase.
Better placed observers, such as the Financial Times, bet this week’s FOMC meeting should serve as a test of its members’ mood regarding the planned increase in US rates. Janet Yellen lacks the authority her predecessors commanded and wants to make sure this critical decision garners full support.
Yang Gang via Caixin | China also has second-most household wealth after the United States, according to an annual report by researchers at Credit Suisse Group, a leading global financial services company.
UBS | The earnings season is right around the corner. We have seen pricing and utilization pressure begin again due to the continued weakness in oil prices and the U.S . rig count. The oil service industry will still remain structurally challenged throughout 2016 and into 2017.
Based on our latest in-house banking survey, sentiment towards the banking sector has deteriorated further over the past quarter. The decline in expectations on the banking outlook reflected rising global growth concerns, uncertainty over Fed funds rates, as well as volatility in commodity prices and currencies.