Regional Specialists Review August 2013
In the U.S., manufacturing and business sales/inventories - two sectors of concern to us over the last several months - are showing marked improvement. News from the UK and continental Europe suggest a trough, if not better. In Japan, Abenomics - in effect an effort to stimulate nominal GDP growth above the level of interest rates and depreciate the currency - continues apace. Naturally risks remain, and the list includes political risk in Japan that could derail recent stimulus efforts, and slowing growth in China and other emerging markets. But the preponderance of evidence suggest most causal factors remain positive.
So what's left to worry about? Our scary list includes slowing earnings growth, rising valuations in some markets and reduced fiscal stimulus in most places.