INSIGHTS
FEB
10
WEEK AHEAD...
The markets got a little bit of this and little bit of that this past week and the Dow lost a fraction on what many would consider, an idling of the data points.
The Chinese economy still seems to have some legs to it and the US Trade Deficit contracted last quarter. Earnings are still a positive and unemployment is begrudgingly shrinking.
While not the perfect scenario, these factors are helping markets approach record territory.
We still see new highs in the next few weeks but no follow through. This trading range will be a narrow one and the real positive of this time period will be when people look at their portfolio statements and realize that their financial condition has markedly improved since the end of 2010. Caution still remains with most people but when they look at their financial situations, there is some relief.
The economy has a long way to go to a sustainable growth pattern but take what you can get, when you can get it.
The highlight of this week will surely be the State of The Union address on Tuesday. The President has said that he will bring some proposals that should help the unemployment picture and try and relieve some of the stress on State budgets. Our main question is: If the US Government is going to spend more money to get more people working, where is this money coming from?
The whole World is talking about deficit reduction but yet they want to spend more. The math doesn’t work.
Business in Washington is more complicated than a Rubik’s Cube and not as easily solved.
This week the retailers will be in the spotlight and typically it will be a mixed bag. Our theory about the rich leading the way back will be on display yet again.
That theory holds that when the rich start opening up their wallets and spend at high-end retailors, the economy starts its recovery.
Look at the last two mini-recoveries and the number bear this out.
The Bloomberg Consumer Comfort index out on Thursday should again show that the consumer while not “all in” is definitely getting his footing back and spending.
Another data point we like is Industrial Production. This has been a number that was almost discarded back in 2004-2008. The belief was that we are no longer an industrial powerhouse; we are a consumer and service economy. This, we believe, is no longer the case. The re-industrialization of the United States is underway and if you want to look towards the underpinnings of a long-term recovery, there it is.
The Chinese economy still seems to have some legs to it and the US Trade Deficit contracted last quarter. Earnings are still a positive and unemployment is begrudgingly shrinking.
While not the perfect scenario, these factors are helping markets approach record territory.
We still see new highs in the next few weeks but no follow through. This trading range will be a narrow one and the real positive of this time period will be when people look at their portfolio statements and realize that their financial condition has markedly improved since the end of 2010. Caution still remains with most people but when they look at their financial situations, there is some relief.
The economy has a long way to go to a sustainable growth pattern but take what you can get, when you can get it.
The highlight of this week will surely be the State of The Union address on Tuesday. The President has said that he will bring some proposals that should help the unemployment picture and try and relieve some of the stress on State budgets. Our main question is: If the US Government is going to spend more money to get more people working, where is this money coming from?
The whole World is talking about deficit reduction but yet they want to spend more. The math doesn’t work.
Business in Washington is more complicated than a Rubik’s Cube and not as easily solved.
This week the retailers will be in the spotlight and typically it will be a mixed bag. Our theory about the rich leading the way back will be on display yet again.
That theory holds that when the rich start opening up their wallets and spend at high-end retailors, the economy starts its recovery.
Look at the last two mini-recoveries and the number bear this out.
The Bloomberg Consumer Comfort index out on Thursday should again show that the consumer while not “all in” is definitely getting his footing back and spending.
Another data point we like is Industrial Production. This has been a number that was almost discarded back in 2004-2008. The belief was that we are no longer an industrial powerhouse; we are a consumer and service economy. This, we believe, is no longer the case. The re-industrialization of the United States is underway and if you want to look towards the underpinnings of a long-term recovery, there it is.