|By PR Newswire||
|January 16, 2014 07:01 PM EST||
SINGAPORE, January 17, 2014 /PRNewswire/ --
Global growth projections by many researchers, including the World Bank, predict that the US will be the key driver. The projections put global growth at 3.2-3.6% this year, from 2.4-2.9% last year.
US manufacturing has topped estimates and the momentum is expected to continue. Other data such as retail sales and increasing job openings have provided a level of comfort to Americans. There are still concerns around the pace of hiring and declining household income. On aggregate, the economy looks to be in better stead compared to the start of last year.
Kelly Teoh, Market Strategist at IG Singapore, says, "The US economy is clearly moving along better than last year. It might not be at the pace that the market would like to see, but there has definitely been a pick-up in momentum. This has been translated as a continued strength in the US equities."
The pullback in the US stock markets has yet to be seen. With the tail risks in the economy dissipating, investors turn to the fourth-quarter earnings as a validation for the advancing equity markets.
Ms Teoh adds, "The market would like to see earnings growth and CAPEX, which were missing in the previous quarters. So far, technology and financials have shown a surprise upside with earnings. In general, expectations will be met and the US rally should continue. The Fed's keeping interest rates low provides a level of comfort for the stabilising markets."
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