US, China, bond yields and more: BofA lists 5 key lessons learnt in 2023 and their investment implications
Read here: Nifty at new high again! B&K sees another 10% upside in 12 months BofA has discussed some key macro lessons of 2023 and their investment implications: Contrary to the unanimous consensus a year ago predicting a U.S. recession in 2023, the economy defied expectations and continued its robust performance. Key factors contributing to this resilience included substantial fiscal expenditures, a tight labor market driving real income and consumer spending, increased capital expenditures—especially in collaboration with public sector infrastructure spending—and the adaptability of the dynamic U.S.
private sector, stated the report. The lesson learned is the peril of ignoring or underestimating the U.S. economy, a formidable $27 trillion entity with a diverse range of strengths.
The U.S. excels across numerous economic sectors, including agriculture, aerospace, energy, entertainment, technology, transportation, higher education, healthcare, finance, space, insurance, and more. This economic diversity has played a role in the U.S.
outpacing the rest of the world, including China, with a remarkable increase of nearly $6 trillion in output since the beginning of the decade. The resilience and versatility of the U.S. economic landscape underscore its status as a global economic superpower, explained the report.
Investment implications: To paraphrase Warren Buffett, “don’t bet against America"— core holdings of portfolios should rest firmly on the shoulders of U.S. assets, said the brokerage. A year ago, expectations were also high that China, likened to a coiled spring, would experience a robust rebound post pandemic reopening.
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