Well not all is bad in the world today…
Promissing economies of US and China seem to be good bets for investors!
The uncertainty of the election results is behind us, and investors go back to focus on the fiscal cliff.
The biggest fear is that the “game of chicken” played between the Democrats and the Republicans will eventually lead to mutual collapse and recession in the American economy.
This concern is validated by evidence received over the past two years by the Eurozone, on the far-reaching effects of austerity plans on the economy, and by investors’ concerns that recession in both European and American economy (combined with a moderate growth rate of the Chinese economy) will lead to an exacerbation of the global economic crisis.
However, most investors believe that U.S. politicians will come to their senses at the last minute and reach a temporary compromise that will prevent recession in the American economy.
Positively, we note that the U.S. economic data continue to point a slight increase in the economy’s growth rate.
University of Michigan’s Consumer Confidence Index had increased for the fourth consecutive month to its highest level since July 2007, ISM Non-Manufacturing declined in October, indicating a continued expansion of the U.S. economy at the beginning of the fourth quarter.
Additionally, a relatively sharp increase was recorded in American exports in September.
China also published more encouraging economic data over the last weekend.
The data provided further evidence of recent stabilization in Chinese economy, after several quarters in which growth had declined alongside the continued moderation in inflationary pressures.