Jim O'Neill of Goldman Sachs said the US markets may have bottomed out on historical evidence. US is not likely to go into prolonged recession, he believes, adding that the exports are doing well. He expects US recovery to be be strong and Q1 GDP to not be negative.
according to him, The stock market in the US has got right actually; if you look at most periods of recession type activity in the US in the past, the stock market normally bottoms out before we see the worst of the data. So long as this is only a mild recession, the stock market is behaving pretty much as it would do historically. In contrast to many people in finance, maybe the US market is selling more than most people think.
A lot of the S&P and the Dow and all US-based multinationals are getting very strong earnings growth despite the US recession, and that’s going to continue.
He IS forecasting a pretty gentle recovery in the US, especially in terms of the domestic demand, but there is a risk that the US recovery could be stronger and I think that’s something that people in the markets have started to think about a bit in the past fortnight.
It's sensible that they do consider that scenario, we are going to get GDP later today, and it might well be. The GDP of the first quarter has not been negative when many people a few weeks ago including ourselves thought it would be so. I think it's simple and people think about the upside risks as well as always going about the downside ones.
