Powered by MOMENTUM MEDIA
Powered by momentum media
Powered by momentum media
nestegg logo

Invest

'Global upturn' set to push markets into growth

By
  • May 08 2017
  • Share

Invest

'Global upturn' set to push markets into growth

By
May 08 2017

The recent upturn in markets looks to be more than a “cyclical bounce” and likely marks the beginning of a transition to a period of better growth, in a stretch that will likely last into 2018. 

'Global upturn' set to push markets into growth

author image
By
  • May 08 2017
  • Share

The recent upturn in markets looks to be more than a “cyclical bounce” and likely marks the beginning of a transition to a period of better growth, in a stretch that will likely last into 2018. 

'Global upturn' set to push markets into growth

In a note to investors, Principal Global Investors chief global economist Bob Baur said there had been a cyclical economic rebound from the “quagmire” of post-GFC markets, noting that “no cycle lasts forever”.

“A global upturn that has synchronised around the world became firmly established last summer and was finally accepted by the investment consensus after the US election. That recovery is ongoing, improving and likely to last well in 2018,” he said.

“What is now happening is likely much more than just a cyclical bounce from an economically ugly time. It’s probable that the adjustment costs of doubling the world’s labor force are behind us, so the global economy is likely in a long transition to an old normal.”

Advertisement
Advertisement

Mr Baur said economic recovery has two phases, the first being a return to inflation and the second being an improvement in growth.

'Global upturn' set to push markets into growth

“Starting early last year, the global economy began to rebound from several years of deflation and a near-recession in 2015,” he said.

“As investment and wages pick up in the United States, core inflation improves in Europe and Japan and growth in China stays the course, this recovery should move to act II: sustainable, above-trend growth.”

Additionally, central banks in the US, Europe, England and Japan are also “feeling better about their respective economies”, Mr Baur said.

Forward this article to a friend. Follow us on Linkedin. Join us on Facebook. Find us on X for the latest updates
Rate the article

more on this topic

more on this topic

More articles