The level of GDP growth in the US over the last three months of 2016 was revised up on Thursday and the overall figures paint a rosy picture.
Real US GDP grew by 2.1% in Q3 of 2016 rather than the 1.9% that was initially predicted, according to the US Department for Commerce, and overall GDP was up 1.6% for the year.
Business and consumer confidence has also proven surprisingly resilient, with Kames’ Scott Jamieson confident US equities have further to climb.
Markets have also reflected the good news with the S&P 500 running for 110 days without a daily drop of more than 1%.
But, eventually, they did fall by 1.4% last Tuesday, with markets this week reflecting the same doubts over the ability of Donald Trump to deliver on his promises after he was forced to pull the so-called ‘World’s Greatest Healthcare Plan of 2017’.
On Monday, the FTSE 100 fell victim to this new Trump effect and saw a 1.1% drop, down to its lowest point since late February.
So, with markets faltering does the positive economic news really mean the US remains a top choice for investors?
While the likes of Rathbones’ David Coombs have continued to support US markets despite their hefty price tag, arguing that the recent turnaround in Europe’s fortunes is a “false dawn” – others such as Morningstar’s Dan Kemp have said they will continue to reduce exposure in the US on the fear that all the good news there could be has already been priced in.
Similarly, Ariel Bezalel, Jupiter Asset Management’s head of strategy for fixed income, said while the US may seem to be “on the road of unstoppable growth” it was important to make sure there was not “too much hope being priced in”.
