Two bull themes for 2012: US and euro equities

ON AA

The global economy has been slowing and there is a risk of recession in certain regions, particularly Europe.

The ability of governments to stimulate economies through fiscal or monetary stimulus is limited and the brakes have been applied to significant fiscal policy action because most key developed economies must pay down high debt levels. For example in the US the Budget Control Act of 2011 mandates a deficit reduction of $2.4trn over ten years, or $240bn per year. As the deficit reduction starts to impact the US growth is likely to be reduced. The US is hardly alone in having a major debt burden, with the same applying to most European nations and Japan. Significant issues may continu...