Economists, Federal Reserve boss Ben Bernanke and the markets just don’t know if there is going to be a double dip recession. Unemployment remains high in the world’s no1 economy and consumer confidence is weak as a result.
The housing market is not lending any support and the US market has dropped sharply over the month dragging most markets down with it.
Whilst everyone is agreed that economic growth in the US and Europe is weak with interest rates low and quantative easing yet to spark any significant growth, the worry is there is little central bank ammunition left for more help.
In the east and emerging markets growth continues to be strong and the Chinese economy officially overtook Japan as the Worlds second largest economy. Even these markets have been subdued in August joining in with the general malaise.
The Japanese yen has again been the safe haven currency whilst ironically the Japanese stockmarket has crumbled reflecting the weak political and economic climate. Germany on the other hand had extremely good growth figures and is providing the engine for European growth.
However at the same time company profits have been quite strong both in the US and the UK with banks especially recording sparkling profits.
Markets have become very fickle and have sharply rebounded in the last couple of trading sessions as US manufacturing improved sharply again this month, all very confusing
