- International investor concerns about slowing China economy, so China stock-market looks less attractive.
- Strong US$ has been a big and obvious trade, i.e. since the rest of the world is still cutting interest rates, but the US is poised to raise them, the US$ has surged.
- Interest rates have been falling fast in China, hence making their currency less attractive.
- Biggest in US.
- If it was a country, would be 12th biggest in the world.
- Roughly same size as Italy, India and Canada.
- Booming - led by Silicon Valley and housing market.
- Budget surplus, 1m jobs added in last year, unemployment down from 12% in 2010 to 6.5%.
- Medium-term challenges = tech bubble bursting and drought.
- Big surplus (revenue > expenditure) under Jerry Brown.
- Primarily due to revenue surge (levy on wealthy + booming Silicon Valley).
- Resulting in record expenditure plans (primarily on education & drought relief).
- Has rebounded approx. 40% year-to-date.
- So has reversed just under a third of the 2014 fall.
- Expected that recent rise will run out of steam as US shale industry is rebounding strongly.
- Currently outperforming UK and US.
- France & Italy leading (pushed by consumer spending off low energy prices).
- Germany lagging.
- Interest rates being cut as central bank tries to boost growth (3rd cut in 6 months).
- Rates expected to continue lower this year.
- Growth slowing as China economy makes inevitable move from export-led smokestack industries to domestic-demand-led (consumption & services).