2024-01-12 11:12:00
Annual conference of US economists gives good news and bad news for the US economy
The annual conference of US economists, held last week in San Antonio, Texas, saw a consensus that the US is headed for growth this year. However, there is a little chance that this growth will surpass the levels seen before the pandemic.
When the American Economic Association met two years earlier, a consensus emerged that due to the inflation that was developing, the Fed would start raising interest rates, leading to higher unemployment and a recession. However, despite the expectations, the stock indices changed direction.
According to experts, investing in basic materials stocks could offer great opportunities for investors. The basic materials sector, which consists of companies dealing with the discovery, extraction, and processing of raw materials, has been identified as a potential growth area. This sector is vital for economic growth and the continuation of the technology revolution.
Two companies that represent key sub-sectors are Freeport-McMoRan and Linde plc. Freeport-McMoRan specializes in the mining and processing of copper, with experts expecting copper prices to rise significantly in the coming years. Linde plc, on the other hand, is the largest industrial gas company globally, presenting strong organic growth over the years.
Both these companies, in addition to their future potential, present significant risks and challenges due to the current valuations of their shares. Hence, investors are advised to exercise caution and carefully consider options before investing.
Overall, the consensus from the conference suggests that the US is set for growth, though it may not exceed pre-pandemic levels. Despite this, investing in the basic materials sector presents significant opportunities for investors, provided they exercise caution and choose their investment wisely.
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