The ISM surveys – together with most other economic data published recently – show encouraging signs that the US economy continued to grow robustly in July. We remain quite optimistic for Q3 growth. The ISM manufacturing survey for the month of July was published last Friday. The headline index climbed from 55.3 in June to […]
In July, job creation was robust, although slightly below expectations. The unemployment rate bounced back but the downward trend appears intact. Together with other data available for July, the employment report gave further credence to our scenario that economic growth will settle at around 3% in H2. We remain optimistic overall on the US economy. […]
Q2 GDP growth was well above expectations, and growth in Q1 and H2 2013 were revised for the better. Despite these upbeat numbers, average GDP growth was certainly very weak overall in H1. Nevertheless, this set of data most probably understates the health of the US economy. Most other economic indicators were far more upbeat […]
Private fixed investment in equipment contracted in Q1. However, indicators available point to a noticeable rebound in Q2, and the prospects for H2 2014 and 2015 actually appear quite encouraging. Business investment in equipment fell by 2.8% q-o-q annualised in Q1. However, this contraction must be seen in context, as the series can be quite […]
The US Federal Reserve’s exit strategy by tapering its quantitative easing is part and parcel of the process of normalisation that the growth and inflation regimes of the world’s premier economy are undergoing. In contrast, the European Central Bank (ECB) may well have to push through more measures yet to counter the risk posed by […]
Calculating expected returns for asset classes forms one of the cornerstones of asset allocation. Having a lengthy investment time-horizon makes it feasible to allow for an eventual innovation shock leading to a paradigm shift in economic regime. We have based our models on a 10-year investment time-frame. For each asset class, we have put forward two projections for annual average returns, the difference being whether […]
The ISM manufacturing survey was published last week. The headline index bounced back further, climbing from 53.7 in March to 54.9 in April, above consensus estimates (54.3). This was the third monthly increase in a row. However, the level reached in April remains well below readings registered in Q4 2014 (average of 56.7). The most […]
We remain sanguine on the US economy. Non-farm payroll employment rose by a strong 288,000 m-o-m in April, well above consensus expectations (+218,000). Moreover, March’s figure was revised up (from +192,000 to +203,000), as was the number for February (from +197,000 to +222,000). Net revisions therefore cumulated to a positive 36,000 (see chart below). The […]
Impacted by particularly inclement weather, weak foreign demand and some downward correction in the pace of stockbuilding, GDP almost stagnated q-o-q in Q1. However, available monthly data point to a substantial rebound in Q2, giving further credence to our scenario that the Q1 weather-related loss of momentum in economic growth will prove temporary. Overall, we […]
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