US data leads to recovery in European stock markets
While European stock markets were down around 2% in afternoon trade there was a sudden about turn when US construction data hit the market. It revealed that construction spending in the US increased by 2.7% last month and investing in private construction by an even greater 2.9%. These are the largest one-off monthly increases since July 2004 and are seen by many as a sign that the US economy is on the up and up.
There is no doubt that the US economy is still one of the major leaders within the worldwide economy along with the likes of China. While China is suffering at the moment it seems that the US is going from strength to strength and investment spending is an integral part of the overall recovery process. The construction industry in the US, and indeed around the world, has been on its knees for some time with investment simply collapsing as the credit crunch took hold and investors looked to retain what liquidity they had.
It will be interesting to see how European stock markets react tomorrow morning and whether the impetus gained from the US data will continue or whether European issues will cloud the day.
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