The stock markets in the United States are on the increase, with the technology industry leading the way.  Two of the key factors in this rise are increased productivity and tax cuts. If this trend continues, then the United States business system will realize an accelerating rate of economic development and stock market appreciation in the coming few months.

In my opinion, the United States business system is on an upward trend. The demand for energy and advance in technology are critical drivers of growth trade and economic development. Technology is a very sensitive sector for the growth of any business system and is instrumental in determining stock market activities and sale of treasury bills and bonds. With the booming business in this sector, there is likelihood that there will be an increase in the activity where the technology industry will sell stocks to enhance their competitiveness. This industry has several players such as Dell, IBM, Advanced Micro, Cisco and Hewlett-Packard all of which want a substantial role in the United States business system. Their urge for improved performance and competitiveness will be essential in determining the business system.

The article asserts that there has been a significant improvement in the stock markets in the recent past. According to the article, the S&P 500 has increased by 20% from October 9. Most of these developments have been as a result of developing technology sector with 46% rise being attributed to info –tech at number one. Gains in telecoms, rise in financials and jump in utilities follow with 39%, 27%, and 21% respectively. The active status f info-tech and gains in telecom is a clear indication of how the technology sector is essential in the United States business system.

Nevertheless, other economic activities are also instrumental in shaping the business systems in the United States. As earlier mentioned, the financial sector is a critical sector in the shaping of the economy. According to the article, a 27% rise in financials contributed to the overall increase in the stock markets. Industrials, material and consumer cyclical are also critical players in the United States business systems.

The upsurge in the American stock market can be attributed to the increased productivity that is enabled by technological development. Business efficiency has also substantially improved through deleveraging and cost cutting practices adopted in several companies. A free market guided by the principles of demand and supply have also been instrumental in the overall development of the American business system.

Nevertheless, it is imperative that the federal government ensure monetary and fiscal policies that will ensure sustained trade growth and development. Critical issues such as tax-cutting and increased levels of debt in the business system can be detrimental to the technology driven an upsurge in the stock markets. It will also be imperative to consider the employment level experienced in the economy. Unemployment and inflation have a positive correlation and are instrumental in determining the route of the economic system. Although the United States is currently facing active path in terms of employment and inflation, it would be prudent to have measures that will ensure sustainability in employment and controlled inflation.  Continued tax reduction in cost of capital will be instrumental in encouraging technology sector that is critical to forming a sustainable business system. Such programs will be necessary for an accelerated rate of economic growth and stock market appreciation in the coming years.

Reference

http://www.nationalreview.com/article/205342/barnburner-stock-market-larry-kudlow

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