The US economy will pull out of recession next year after pressing the 'fiscal and monetary accelera...
The US economy will pull out of recession next year after pressing the 'fiscal and monetary accelerator', according to Frederic de Morode, investment director at Fidelity.
'US economic indicators at the beginning of December pointed to solid consumer spending, stabilising manufacturing orders and a surprise bounce in orders for the services sector,' he said.
'The bears are still prowling in the shape of negative US GDP and continuing concerns over corporate earnings, but the trend is up for global equities.'
The thinking at CrÃ©dit Suisse is similar, where predictions are an end to recession with recovery sparked by cyclical forces relating to energy, fiscal policy, the deposit taking sector and inventories.
But CrÃ©dit Suisse predicts a difficult decade with four opposing forces relating to globalisation, deregulation, 'just in case' measures such as heightened security, and geographic concentration of the economy as curbing economic growth.
According to Morode, the US recovery will be led by cyclical sectors ' electronic semi-conductors, communication equipment, computer systems, textiles and metals. Traditionally more defensive sectors ' natural gas, savings and loans, and gold ' have been underperforming.
CrÃ©dit Suisse also believes there is a risk of a large fall in the yen triggering devaluation in the rest of Asia and a deflationary shock wave that could affect the US and Europe, bringing inflation and interest rates close to zero.
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