SCOREBOARD: Double dip dismissed

US GDP figures show the country's economy is no longer at stall speed, and signal a market uptick.

Friday’s session really didn’t offer much in the way of excitement, what with US markets mixed around zero again and European market receiving a modest bid. Again the macro flow was positive and the new news came from US GDP, which was a bit stronger than expected (1.8 per cent), rising 2 per cent for the third quarter. The vast bulk of that growth was provided by consumers. Business investment added virtually nothing (with a small detraction to growth provided from inventories), government investment added 0.7 per cent while net exports took off a bit. Combined, inventories and net exports took off about 0.3 percentage points from growth.

So where does the US economy sit? Clearly we’re not talking about stall speed growth anymore or double dip recessions. By itself this is a very positive development for market sentiment: neither was ever a high probability.

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