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The scale of deterioration in the U.S. fiscal position is huge and failure to get to grips with the issue runs the risk of more debt downgrades, more market volatility, higher borrowing costs and slower potential economic growth, ING economists say in a note. "The U.S. fiscal position is vulnerable to both structural factors--e.g. an ageing population--and cyclical factors such as economic growth cooling, rising unemployment and high borrowing costs," they say. This year's election comes against a backdrop where the government is borrowing the equivalent of 6% of GDP while the national debt totals $35 trillion, compared to a 2% GDP surplus and a debt less than $6 trillion 24 years ago, they say. ([email protected])
Fund managers continue to favor equities and are most overweight on U.S. stocks, while dropping their allocations of eurozone equities, Bank of America Global Research's July global fund manager survey finds. The allocation of eurozone equities fell to a net 10% overweight, down 20 percentage points month on month and marking the largest monthly drop since July 2022, BofA says in a press release accompanying the survey. Overall, fund managers remain overweight on equities and underweight on bonds, it says. ([email protected])
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