Ignore The ‘Panic’ Peddlers, The Global Economy Is Growing
At Credit Suisse Group AG (NYSE:CS), economists are sanguine even as they detect a “faint whiff of panic” over China’s stock-market turmoil and the continuing uncertainty about the Grexit.
CS is projecting improvements in the US and Japanese economies alongside strengthening momentum in industrial production worldwide.
A 3rd straight gain in monthly new orders internationally is supporting their optimism as they reckon it’s the best lead indicator of demand for goods.
The upbeat tones stand in contrast to that of the International Monetary Fund (IMF), which last week said the world economy will grow 3.3% in Y 2015, below the 3.5% it estimated in April. Much of that reduction, however, was due to the weak Q-1 in the US.
The Big Q: Why the potential lack of contagion?
The Big A’s: 1,2 and 3 below;
1. For Greece, CS is confidence that Euroarea authorities will prevent it by using tools such as the European Central Bank’s bond-buying programs in case the country is forced to adopt a new Drachma.
2. For China, stocks still account for just about 20% of household wealth, so their influence is limited and consumption also plays a smaller role in GDP than elsewhere.
3. The MSCI World Index of stocks is set for its 3rd straight weekly decliner, Hans Mikkelsen, a credit strategist at Bank of America Corp (NYSE:BAC). points to gauges measuring the outlook for inflation in the next five years as the Key thing for investors to focus on when determining the future.
Current long-term inflation expectations are strong, that despite the big declines in Crude Oil prices, depicts a much better outlook the global economy growth.
Stay tuned…
HeffX-LTN
Paul Ebeling
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