The gurus at Capital Economics also point to a somewhat rosier outlook, suggesting some of the headwinds that negatively affected Q1’s GDP growth will fade as we go through the year.
One headwind that looks likely to remain, however, is the lack of support from fund selectors. This is translating into fund flows going in the wrong direction with net outflows from funds in the Investment Association’s North America and North America Smaller Companies sectors.
This is backed up by the forward-looking 12-month view from Last Word Research, with more than twice the number of fund selectors looking to sell out of US equities than looking to buy them.
In its latest sector report, Rayner Spencer Mills Research explains: “The US economy remains the most influential globally and most of the world’s equity markets are correlated to it either directly or indirectly. This means that all investors need to be aware of what is happening in the American economy as well as in their domestic markets.”
