·
World
Bank reduces global growth forecast……The World Bank reduced its global
growth forecast for 2014 to 2.8% real growth from 3.2% growth. The reasons:
slower U.S. growth in Q1 and lingering geopolitical tensions such as the Ukraine
crisis.
What’s the point? The World Bank’s
economic forecast reduction is driven primarily by events that have already
occurred and they pointed out that they expect growth to accelerate moving
forward. Given recent economic data, particularly employment data, we agree
with the forecast for accelerating growth, particularly in the U.S. This has
positive implications for corporate earnings growth, which is a key driver of
stock prices. Link: http://www.reuters.com/article/2014/06/10/us-worldbank-economy-idUSKBN0EL2JX20140610
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Secretary
Lew sees stronger growth ahead….In addition to World Bank’s outlook,
Treasury Secretary Lew stated today that he too expects U.S. economic growth to
accelerate moving forward in 2014. He expects recovery from the difficult first
quarter.
What’s the point? Lew’s comments appear
positive and support our view on the economy,
however Lew did state that he believes more has to be done to support employment
growth and encourage capital investment in the U.S., both of which would
strengthen the recovery. Link: http://money.msn.com/business-news/article.aspx?feed=AP&date=20140611&id=17692202
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