The recent economic improvement in the US is part of a broader global trend, with confidence in Europe, China and emerging markets all improving as well, says Principal Global Investors.
Deflation pressures have begun to ease and trade-weighted dollar prices have passed their peak, Principal Global Investors chief global economist Bob Baur said, and with oil prices passing their low point, some of the challenges facing global markets are set to recede.
“Real growth is still slow, but nominal growth is picking up as deflation fades, and it is nominal growth that brings profits,” Mr Baur added.
Mr Baur commented that the improving US job market was supporting consumer confidence in the US, with consumers now “the most upbeat since August 2007”.
“Confidence rose the most at the lower end of the income distribution; for households with income under $15,000, optimism is the highest in 15 years,” he noted.
“More jobs, rising wages, and improving enthusiasm suggest consumer spending could stay strong and resilient.”
Outside of the US, Mr Baur said economic data is looking equally positive, with China’s economy stabilising and household spending driving growth across the Eurozone.
“Eurozone business surveys have held steady since the UK vote [to leave the European Union], but the latest manufacturing reading is up nicely in September. Consumer confidence is rising in France, Germany and Italy,” he said.
Two of the big four banks have updated their home loan serviceability assessment policy in response to APRA’s regulatory amendments. ...
The Australian exchange-traded fund industry has overtaken the $50-billion milestone, according to the newly published report by BetaShares....
One chief executive has said that the reputation of bankers was at rock bottom and hoped that it would not get any worse. ...