Housing may lead US recovery
By Lydia Chen |
October 27, 2011, Thursday
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Print Edition
Print Edition
Housing may lead the next economic recovery in the United States, and there are hopes that the US stock market may also pick up strongly especially when shares are now at their historic low valuations, said Legg Mason Capital Management yesterday in Shanghai.
A slight recovery has been seen in the struggling US housing market, with the National Association of Home Builders Index for October showing the largest one-month gain since April 2010, said the firm which has assets of US$643 billion under management by the end of August.
It said other indexes tracking the macro-economy, corporate earnings and stock valuations signaled the stock market may bottom out.
"Unless the economic situation deteriorates further, the market is set for a big reversal," Mary Chris Gay, portfolio manager at the Baltimore-based firm, said. "It may not require good news. It may only require an absence of bad news."
The real economy may grow by 2 percent in the third and fourth quarters, after a 1.3 percent growth in the second quarter and 0.4 percent rise in the first quarter.
A slight recovery has been seen in the struggling US housing market, with the National Association of Home Builders Index for October showing the largest one-month gain since April 2010, said the firm which has assets of US$643 billion under management by the end of August.
It said other indexes tracking the macro-economy, corporate earnings and stock valuations signaled the stock market may bottom out.
"Unless the economic situation deteriorates further, the market is set for a big reversal," Mary Chris Gay, portfolio manager at the Baltimore-based firm, said. "It may not require good news. It may only require an absence of bad news."
The real economy may grow by 2 percent in the third and fourth quarters, after a 1.3 percent growth in the second quarter and 0.4 percent rise in the first quarter.
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