Regional Specialists Review November 2015
In just a few short months we have gone from a period of enthusiasm (around mid-summer) to a couple of months of fear (late in the third quarter) to, once again, hope and relative confidence. Riskier assets have followed this yo-yo pattern and are now in the midst of a rebound toward stocks and higher-credit risk and away from cash.
In a show of the power of a single number, the latest strong U.S. payroll number helped further this trend. But the U.S.' role as the locomotive of the world - now that China is wavering - remains vulnerable, and few others are ready to grab the baton of economic leadership.
Meanwhile, the rebound in U.S. stock prices to fair-to-slightly expensive levels once again creates a close link between future performance and earnings growth, which unfortunately has gone missing in the homeland.