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Thread: US Economy

  1. #1

    Default US Economy

    A question for the wise.

    What would you choose to invest in, if you knew the American economy was going to have a severe setback.
    I have been reading a few reports on the American economy that paint a dismal future for the American economy, and knowing how we catch a cold when America sneezes I am interested in other peolples thoughts on this subject.
    What investments ???????????

  2. #2

    Default Re: US Economy

    Be careful when reading articles, journalists are just trying to find a story, it just depends on who they interview on any given day, many analysts have different opinions.

    Anyway, that said, if the us economy slows/go backwards, you expect bond prices to increase (interest rates to decrease) strongly around the world, including here. So investing in bonds or assets with some substitutability would be the go broadly speaking. If you are confined to going long on the asx, perhaps property trusts/infrastructure stocks are the best way to gain exposure to this theme.

    Longer term bond prices have already started rising here and in the US in the past few weeks, which means punters are already starting to bet on this scenario.

  3. #3
    Administrator Joe Blow's Avatar
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    Default Re: US Economy

    Have moved this thread to International Markets.

  4. #4

    Default Re: US Economy

    Europe has had a bit of a spanking today, with the DJIA mildly spanked at the present.

  5. #5
    Illogical Vulcan websman's Avatar
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    Default Re: US Economy

    Quote Originally Posted by Freeballinginawetsuit
    Europe has had a bit of a spanking today, with the DJIA mildly spanked at the present.
    Worries about possible interest rate hikes caused the markets to drop, along with jitters about the 9/11 anniversary.

    The good news, however is the big oil find in the Gulf of Mexico. Oil prices are dropping. The economy should be ok for now.
    Disclaimer: I can not be responsible for anyone sprouting Vulcan ears from reading my posts. I will also not be held liable for any psychological damage caused by my irrational thoughts.
    Webs...Illogical Vulcan

  6. #6
    noirua's Avatar
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    Default Re: US Economy

    The only visible, index wise that is, problem for the US Economy is the rise in the producer price index, including energy. Hopefully, the recent reductions will steady the economy and rule out any more interest rate rises: http://www.bls.gov/eag/eag.us.htm

  7. #7

    Default Re: US Economy

    Quote Originally Posted by websman
    The good news, however is the big oil find in the Gulf of Mexico. Oil prices are dropping. The economy should be ok for now.
    I think the significance of the oil find has been overstated greatly. Whilst good news, the world needs to be finding this much oil every 6 months just to match the rate of consumption. Odds are that even with this discovery, one of the best for a long time, included the world will still have used more oil in 2006 than it discovered.

    That said, if the estimates of size are correct then in due course it will become a significant oil producer. The actual production profile depends heavily on how the field is actually developed and what the geology is like. It's about a quarter the size of the North Sea and less than 1% of oil found worldwide to date or about 7% of oil found in the USA to date. Significant and worth developing but it's not something that's going to revolutionise the oil industry unless it's the first of many such discoveries in the area. Possible...

    At this stage I think the market has over-reacted somewhat.

  8. #8

    Default Re: US Economy

    There are signs that the US economy may be slowly turning around, but there is still a lot of negative sentiment out there.

    Given that the US market has spent much of the last five years advancing north, the big question is, has it gotten ahead of itself and are we due for a significant correction, or are we on the cusp of a new wave of global economic growth?

    The bull market of 2003-2008 was imbued with a real sense of optimism, and the belief that the global economy was supported by an exponentially growing Chinese economy. However, the last five years have been a lot more tentative and hesitant and there is still an unmistakable cynicism in the air, a feeling that the growth in US financial markets since 2009 has been overdone, and based primarily on the extended period of quantitative easing. It has all felt a little desperate and artificial... or is that just post-GFC cynicism?

    It does seem like the US markets are at a crossroads. Is the recent positive economic data that has been coming out of the US a sign that things are finally turning around, or is this all a mirage and we have many more years of a stagnant, sideways market to come?

    Where is the global economy headed?

    Very interested in the views of others.

  9. #9

    Default Re: US Economy

    The DJIA has risen from under 7,000 to more than 16,000 in the last four and a half years. An astonishing rise in the face of a sluggish, underperforming US economy.

    Is there more growth to come, or are we about to experience a pullback?
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  10. #10

    Default Re: US Economy

    Might want to pop a trend line across those volume tops, left to right, the divergence to the climb reveals a little.

  11. #11
    Formerly known as 'STOCKWINNER' MARKETWINNER's Avatar
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    Default Re: US Economy

    Still DOW has a leg. Dow broke 16500 again. There is a possibility that there could be correction in 2014. The USA reported trade deficit of four year low in November. It is becoming more energy independent.

    My ideas are not a recommendation to either buy or sell any security, commodity or currency. Please do your own research prior to making any investment decisions.

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