US economy beats Europe, Asia to recovery from Covid-era headwinds

Soft landing? The US economy has outpaced its European and Asian counterparts to represent the world’s best economic recovery from pandemic-era headwinds as the country averts recession and moves into a soft landing, the Washington Post reports. Fresh inflation data showed that the US hit its 2% target over the second half of 2023. Meanwhile, the country saw 3.1% growth over the past year.

What the US did right: The US government made hefty payouts in the wake of the pandemic, increasing spending in the form of loans to small businesses and unemployment benefits more than its European and Asian counterparts. The government allocated 25.5% of its GDP to soften the blow of the pandemic, compared to 15.3% in Germany and 9.6% in France.

Fiscal policy is key: The government’s fiscal policy could play a bigger role in shaping the outcome of future economic downturns, more so than the Fed’s monetary policy, said Claudia Sahm, a former Federal Reserves economist.

THE CLOSING BELL-

The EGX30 rose 3.5% at yesterday’s close on turnover of EGP 6.2 bn (92% above the 90-day average). Foreign investors were net buyers. The index is up 15% YTD.

In the green: Alexandria Containers and Cargo Handling (+17%), Sidi Kerir Petrochemicals Company (+16.9%), and Oriental Weavers (+15.7%).

In the red: GB Corp (-3.5%), ADIB Egypt (-2.4%), and Edita (-1.4%).

Major Asian benchmarks are largely in the green in early trading this morning. Futures suggest that stocks on Wall Street will dip at the opening bell later today, while major European benchmarks could open the day in the green.