·
Housing
data stronger……..National Association of Realtors reported this morning
that existing home sales rose 4.9% in May to their highest level in nearly
three years, better than expected, and suggesting the pace of the housing
market may be picking up.
What’s the point? Housing is an
important driver in the U.S. economy and an acceleration in housing sales and
construction would be a significant positive in sustaining the current economic
recovery. Housing, like job growth, has been in a “slow motion” recovery in
this economic recovery for a variety of reasons. We think housing should
continue to improve albeit a gradual improvement, with the potential for some
modest acceleration as job growth and mortgage lending improves. Link: http://money.msn.com/business-news/article.aspx?feed=OBR&date=20140623&id=17722196
·
China
manufacturing index better than expected…….The HSBC China PMI rose to a
better than expected 50.8 in June, and grew for the first time this year.
What’s the point? There has been
growing concern in the investment community about the pace of growth of China’
economy. A significant slowing in the Chinese economy would have significant
repercussions for global growth. Today’s China PMI data offers support that
recent measures taken by China to encourage growth may be having some positive
effects. While the Chinese economy is slowing, we believe the Chinese
government has significant financial resources and policy flexibility to apply
in supporting growth. That said, a significant risk for the Chinese economy
remains a very high level of debt leverage built over the past five years primarily
to support a real estate boom. Link: http://money.msn.com/business-news/article.aspx?feed=OBR&Date=20140623&ID=17722476&topic=TOPIC_ECONOMIC_INDICATORS&isub=3
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