Trends - What to Expect
Econoclast Special Report
The global economy continues the long wave uptrend which likely started about the time WWII ended. Equity markets follow a similar pattern. Economic growth and increases in equity prices are a common element of this secular uptrend. The Econoclast examines trends and implications for the economy and the markets.
Objective, Economic Policy and Expansion
By MIKE COSGROVE - Econoclast
The U.S. economic expansion is one year old. U.S. growth in the second half of this year is expected to average near 2% with 2011 growth averaging near 2.5%. The global economic expansion can be expected to run for several years with global growth averaging 3.5%. The global growth outlook favors the industrial, technology, materials and energy sectors.
The U.S. economy moves ahead due to: 1) consumer spending by the 90% of employed workers, 2) capital spending and 3) export growth.
Monetary policy remains constructive for the economy and equities. The Fed is on hold until next year as inflation concerns melted away with the European collapse. Fiscal policy -- tax, regulatory and spending activities – are, on balance, unfriendly to business formation, capital creation, job growth and equity prices as the policy mix dampens the extent the U.S. is able to participate in the global expansion.
Click on the PDF link (right) to view the August Trends report. The special topic is Objective, Economic Policy and Expansion, pp. 3-12. A summary of this report can be found on pp. 1-2.
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Mike Cosgrove (principal at Econoclast, a Dallas-based capital markets firm) is a professor at the University of Dallas. His research involves monetary and tax policies and their relationship to inflation and economic growth. His Ph.D. is from Ohio State University. *Reproduced with permission.
AUGUST TRENDS REPORT
The Econoclast examines trends, scenarios and implications for the economy and the markets.
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