Positive things happening in the global economy
Everybody is disgracing the world economic system. All the economic data coming from various financial institutions showcase grimmer picture and poor handling of world economic system. Pessimism has so deeper settled into the people’s mind that they are not looking at the brighter side.
But, there are few good things happening around the world which may prove to be the turning point of the current disastrous phase of financial world. I am not saying that these things may well be enough to end the crisis but yes, they are definitely the silver lining.
Here is the list of few such economic events and news:
1. Growing World Economy
World economy continues to grow and it is estimated that in 2011 total GDP of the world would grow by 3.2%. Emerging economies are still on high growth trajectory. India would grow at around 8%, China at 9.5%, Russia at 4.5% in 2011. These countries are seeing increasing domestic demand which is less dependent on global slowdown. The momentum of these economies is providing some resistance to the debasing of rest of the economies.
2. US Economy is growing
US economy is expected to grow by 3 to 3.25% in 2011 and 3.5 to 3.75% in 2012, these estimates are according to Dallas, Chicago and Philadelphia Fed. This is a very healthy growth rate for US by any standard.
3. IPO: a big hit
IPOs have been a success story in recent months. More and more tech companies are coming up with IPOs and they being given the thumbs up by the investors. So, the steam is still there. Belief of investors in businesses continue to improve. Few very best IPOs are in line to be launched in coming months which include the most awaited Facebook IPO.
4. Natural Disasters will not last forever
Natural Disasters are only for short period of time. Economic setbacks caused by Tsunamis, Tornedoes and floods are not to stay here permanently and there effects are already trickling away. Japan Tsunami caused a loss of around $300 Billion dollar. There will be high demand generated in world economy as Japan starts to rebuild itself.
5. Companies sitting on big cash
Companies are holding lots of cash which they will eventually be using for hiring, buying equipment and expanding. As of the first quarter, non-financial U.S. companies held $1.84 trillion in cash, a whopping 27% more than in early 2007 before the recession. This night be the highest cash holdings by companies in the history.
6. US Bond Yields
US bond yields are still under permissible limits. Bond yields for 1-Year and 5-Year bonds are 1.3% and 2.4% respectively. Investors are keeping there faith in US government and they anticipate the economy to do better in coming years.
7. Lower prices than the valuations are attractive buying opportunity
Most of the companies listed on stock exchanges are trading the lower prices than their actual valuations. This is an buying opportunity for the investors and any downfall further would result in buying trigger. So, the markets would prevent themselves from crashing.