Economics for Investment Q3 - Riding the AI boom

Our latest Economics for Investment flagship publication provides clients with detailed economic and market information on the major economies - US, China, Eurozone, UK and Japan. The conflict with Iran still has the potential to cause another energy shock, but if that is avoided as we expect, the economic outlook has improved. AI is the main driver of growth in the US. Not higher productivity growth yet, but its huge impact on business investment and, via the strong stock market, on consumer spending. There is a huge churn in technology shares as investors try to discern the winners and losers but, despite the volatility, the overall market is high, helped by massive profit margins for companies benefitting from the AI boom. The Focus section this time looks at the impact of AI on interest rates concluding that the net effect is to make rates higher than they otherwise would be.

In other countries, provided the energy shock fades, the outlook is for modest growth and contained inflation, with attention on efforts to reform in the euro zone and potentially also in the UK with a new prime minister. We look at China, still struggling with the end of its investment-led boom. And Japan, facing a weak yen and with investors questioning its high government spending and cautious central bank tightening.

For a complimentary copy of the report please email info@tricio-advisors.com