The US growth figures for the 3rd quarter show record growth, and the labour market report of the past month confirms that the American labour market is headed for "fairer winds". At the same time, the companies' earnings are continuing upwards. The US growth boom has not yet spread to Europe, but an upswing is expected - supported by growth in consumer spending and investments.
However, growth uncertainty is expected to increase again after the 1st quarter of 2004. This is due to a number of factors, viz. that the effect of the fiscal stimuli will begin to ebb away, that part of the current growth seems to be "borrowed" from the future growth (e.g. the sale of consumer durables), that the US balance of payments deficit is soaring and that the creation of new jobs is too slow - despite the fairer winds. In the long term, failure to create jobs may mean that the recovery, growth in the companies' earnings and thus also movements in market prices may come to a halt. Also, escalating fear of terrorist attacks and a continued weakening of the US dollar may contribute to changing the atmosphere abruptly and cause more than just a ripple in the water.
Read the article "American growth boom creates a basis for a continued positive atmosphere on the equity markets - but for how long?" in Focus no. 70 .
