Printer Friendly

Confidence is on the rise in US economy.


The American economy is looking decidedly perky at the moment.

It is nice to see employment is picking up, as we had hoped it would, on the back of much improved residential construction levels and that the Manufacturing ISM Survey unexpectedly took a small turn for the better last week.

US consumer confidence is reaching multi-year highs and the days of these surveys being described as 'worst since...' now seem an age away.

For the markets, what matters is the upcoming bun-fight about the 'fiscal cliff'. The improving state of the economy might make the political finger-jabbing a little less fractious than if it were still marooned in its summer doldrums, but it should still be fun to watch.

My view remains that the fiscal cliff will ultimately prove to be an enormous red herring, but I cannot get away from the markets' need to see something starting to happen.

On to China and the make-up of the Standing Committee within the Politburo.

The expectation is that there will be a shift towards the Tuanpai faction within the Communist Party, with this resulting in China placing a greater emphasis on wealth equality rather than breakneck expansion of the eastern seaboard. It is also an interesting reflection that the composition of the Chinese Politburo is now more important for the global economy than who is President of America.

Meanwhile, back at home, the Bank of England issue is starting to warm up.

Applications for the governorship have been on the Chancellor's desk for a month and he has let it be known that he wants to announce Sir Mervyn King's successor before the end of the year. Sir Mervyn needs to be moved on quickly and the Bank passed into new hands if it is to avoid matching the troubles of the Chinese Communist Party.

The ECB is the prime example of what new hands can do. Mario Draghi has performed wonders to hold the Eurozone together by tackling headon the issues that his predecessor failed to acknowledge even as problems.

Europe's wranglings will rumble on, as they always have, but they have become smoke from a distant fire.

Jim Wood-Smith is head of investment strategy at Investec Wealth & Investment Sponsored column
COPYRIGHT 2012 Birmingham Post & Mail Ltd
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2012 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:The Birmingham Post (England)
Date:Nov 8, 2012
Previous Article:OBE after head improves school.
Next Article:Air travellers face Christmas chaos; A round-up of the most popular stories from the past week at

Terms of use | Privacy policy | Copyright © 2020 Farlex, Inc. | Feedback | For webmasters