In the November Monthly Economic Report, David Bakkegaard Karsbøl predicts a period of stagnation for Europe. However there are sufficient growth-supporting factors at play for the region to avoid recession. By contrast, the picture in the US economy is one of ‘gradual overheating’ with the mood ‘optimistic bordering on the unrealistic’.
Stock markets are maintaining their momentum but buyers should beware of the extreme valuation gap between the highest and lowest-priced stocks. Spreads in high yield corporates have begun to look interesting again and the market should be supported by money from banks anxious to improve their lending figures.
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