Are investors worry about the US economy? This is what the capital economy says.
Are investors worry about the US economy? This is what the capital economy says.
Although there are concerns that increase in several angles above the US economic situation, both equity and investor analysts do not seem too worried, according to analysts in the capital economics.
Weak job data for July, coupled with a sharp revision for payroll in June and May, re -reinforces some concerns that President Donald Trump’s policy, especially strong actions against immigration, can be included in the slowdown of wider labor demand.
The next numbers this week showed the US service sector which was stopped, with a slight change in order and further sauce in the work. Prices paid by these companies also rose at most in almost three years, painting a picture that may occur warm growth and improvement of inflation dubbed “stagflation.”
The stock market, however, seems relatively uninterrupted. After declining after last Friday’s jobs, the benchmark re -clawing the loss this week, because sentiment was driven by a solid company income and sustainable enthusiasm for artificial intelligence applications.
Hope is also high that the Federal Reserve, who wants to extinguish the decline in the labor market, even though there is a vigilance for the continuous price increase above the target, will move to cut interest rates at the coming meeting in September.
In a note, the capital economy analyst led by John Higgins indicates that the forward forward-twelve-month analyst for income per share shows that many growth in the S&P 500 has been in the “large technology” sector such as information technology and communication services. Most of this is caused by hype around AI, the analysts said.
Meanwhile, after flat in recent years, the same number for the remaining index has increased by around 8% since the end of 2023.
“It didn’t scream the upcoming recession,” wrote the analysts.
They added that investors did not seem to be “far -concerned” about economic paths, quoting data that showed greater performance in the stock of the cycle and defensive sector of the Production Producer Index and the title of the title planted with the main product of the Institute for Supply Management.
“One of the interpretations is that [investors] Be satisfied. Another is that economic prospects are better than those suggested by the ISM survey, “said analysts.
Source: Investting.com
