Here’s Steve Peasley’s latest update on US jobless figures for March. Whilst Steve’s focus is as an investor and trader, I think this perspective is still valuable to keep up us to speed on what is happening in the general economy and why.
The US weekly jobless claims spiked to 385,000 during the Easter week. This was a surprise for some commentators since the ‘usual’ level has been running at just below 350,000 on average. There’s an argument from some quarters that this spike was caused by the Easter Holiday weekend. I’m not too sure about this as I think worries in other areas of the world, especially Europe, inevitably have a significant bearing on US business.
Despite strong stock market performances over recent months, Steve is advising his clients to move out of equities and into cash, as he’s convinced a market correction must happen soon now, sending stocks crashing down. I agree with this assessment. Although there have been several encouraging signs of a slow US recovery, on the other hand, growth of the US economy is also dependant on markets outside of the US and in the wake of the Cyprus episode, confidence in the Eurozone is looking increasingly fragile.
Reviewing the financial press this week, my own view is that the question on many people’s minds now is that after Cyprus, where will the next European melt down happen and when? Slovenia is a very worrying case. It has an overextended banking sector at 144% of GDP ( Cyprus was 'only' around 85%) and its non-performing loans have reached 15% of total assets in the wake of a construction binge (hello Spain and Ireland)…
My thanks as always go to Steve for his concise and insightful commentary.
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