The 2011/10/31 at 06:50
After a catastrophic third quarter marked by a fall, unseen since 2002, of the global stock markets, investors seem to have found new reasons to be hopeful. This summer, markets were scared by the combination of US statistics being revised downwards in the second quarter (revealing that the United States had suffered, during the crisis, a loss in production far higher than expected) and declarations by numerous economists (including Nouriel Roubini, known as the person who predicted the 2008 crisis) forecasting a return to recession in the United States. But ever since, the picture has been brighter. The markets have also escaped the curse of October, a month reputed to be unlucky for stock markets since the crashes of 1929, 1987, 1989 and 2008. The Paris Stock Market rose by more than 12 % in a single month, and Wall Street, by over 11 %. The two hypotheses weighing down upon markets have largely been cleared. Members of the European Union adopted an agreement which namely envisages reducing Greece’s debt and beefing up the European Financial Stability Facility (EFSF) to avoid contagion spreading to other countries. At the same time, US statistics have clearly eliminated the probability of a ‘double dip’ (return to recession) suggested in August.
According to JPMorgan AM executives, the theme to explore is an acceleration of activity in the United States in the fourth quarter. They suggest that “while a recession remains the major risk, there are reasons to believe in a recovery of growth”. The situation on the job front has improved, as attested by the announcement in September of an extra 103,000 jobs created, revising the previous month’s figures upwards. In addition, retail sales progressed by 1.1 % in September, the strongest rise in the last seven months. Stakes are high. Consumption in the United States generates almost three-quarters of the country’s growth. The first results of companies in the third quarter reinforce this optimism. Boosted by the recovery of consumption in the United States, the food industry group Pepsico, the global retailing leader Wal-Mart and Google have come out with better results than expected: the Internet giant published net profits of 2.73 billion dollars (1.63 billion euros) in the third quarter, up by 26 % over a one-year period. In Europe, the economic situation remains preoccupying. Contrary to expectations, the European Central Bank maintained its guiding rate at 1.50 % in October. While recognising the existence of risks of a downward impact on growth, the ECB has above all shown concern about the evolutions of inflation, recalling that it should be above 2 % until the end of the year, before dropping. But the risks of recession are growing, and economists anticipate a 50 basis point drop in December when the ECB will update its economic forecasts.