Recently, Fed came out with the most funny statement that meant there is 'significant risk' to global economy. Are they still think too much of themselves?!. Of course, US could follow Japan of 1990s thanks to the stupidity of US Fed leadership, but the world won't follow the recession of US.
World will brush aside US just as the economic sluggishness of Japan - then the 2nd largest economy - was ignored by the world. Nikkei Index crashed during 1990s from 20000 to 8000. But during this period US Dow and SPY recorded sharp increase. So did the European indices. So, going forward, you will see corrections in stock indices of US, but Emerging Markets - especially China and India - will march ahead. And of course, those US companies with global reach and focus on these markets could also do well.
Soon US will become the SECOND largest economy in the world as China claims No 1 slot. Already they are ahead of US in many fronts. e.g the largest car market is in China now, the largest number of new millionaires. There are many who wants to see China to go down economic recession route along with US just because they export to US. But China is moving into their untapped potential of huge population with increasing wealth. China will never enter the recession zone! on the other hand it will continue to grow
On the heels is India, which will topple Japan as the third largest economy during this year or early next year. India's growth momentum is unstoppable and they do not have any significant exposure to US except IT. Hence, they are very safe in today's global economic environment.
Both China and India will benefit from reducing commodity prices.
Hence, even if US hits recession zone, these two giant economies will act as the counter balance.
Don't worry , be happy and enjoy the Discount Season in the stock markets!
World will brush aside US just as the economic sluggishness of Japan - then the 2nd largest economy - was ignored by the world. Nikkei Index crashed during 1990s from 20000 to 8000. But during this period US Dow and SPY recorded sharp increase. So did the European indices. So, going forward, you will see corrections in stock indices of US, but Emerging Markets - especially China and India - will march ahead. And of course, those US companies with global reach and focus on these markets could also do well.
Soon US will become the SECOND largest economy in the world as China claims No 1 slot. Already they are ahead of US in many fronts. e.g the largest car market is in China now, the largest number of new millionaires. There are many who wants to see China to go down economic recession route along with US just because they export to US. But China is moving into their untapped potential of huge population with increasing wealth. China will never enter the recession zone! on the other hand it will continue to grow
On the heels is India, which will topple Japan as the third largest economy during this year or early next year. India's growth momentum is unstoppable and they do not have any significant exposure to US except IT. Hence, they are very safe in today's global economic environment.
Both China and India will benefit from reducing commodity prices.
Hence, even if US hits recession zone, these two giant economies will act as the counter balance.
Don't worry , be happy and enjoy the Discount Season in the stock markets!
1 comment:
Hi Ciby
Strong opinions I should say....but very interesting, do agree that China and India will grow but unless they open up their economies it is never going to be easy, they are quite strong because of their domestic GDP, but this is 21st century....and an era which has seen the interdependencies being evident
Like you said just enjoy everyday and be happy!
KK
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