While consumer confidence in the US has pulled back a little,it
has to be remembered that this is after some very strong gains of late,
and while not another increase, the consumer confidence level is still
consistent with firm to strong economic growth. I am also encouraged in
that consumer confidence is daily bombarded with negative headlines, and
therefore actual activity, as opposed to confidence, may well be higher
by a more significant margin than is historically the case.
US housing prices remain a non-concern, as it is clear that they have stabilised many many months ago post the sub-prime crisis. The worst is behind us on that front, and that is all we need to know. The view here since late 2008 early 2009, has always been that the US economy would recover, as it did in 2009 and now this next phase late 2011 through 2012, in parallel with high un-employment and a depressed housing market. Bith these aspects of the economy are undergoing long tern structural adjustment.
The on-going trend in economic data remains positive in the US, and while unemployment picked up a little in Italy, it hit a two decade low in Germany, so even in Europe there are signs of hope. Overall unemployment in Europe is at 10.4%, a high but managable level. This is not too different a situation to that of the US only a few months ago, and like the US, there are more reasons to be optimistic than the consensus views suggest.
Our overall view on the situation in Greece,that there would be a lot of tough talk, before arriving at an amicable solution and agreement, remain on track. Any moment now we should hear surprisingly good new on that front.
Looking further ahead the US elections are likely to have a very limited impacton markets, perhaps less than ever before. It is likely the incumbant will remain in place, and after the huge and dramatic events of recent years, from GFC to European sovereign debt, it will be difficult for a mere Presidential election in the world’s second largest economy to ruffle investors feathers too much. So suggest the overall up-trend, will simply continue to power on.
As for the short term correction, whichsome media outlets have highlighted as “longest running correction since August” well it is only 4-5 days and with only a minor percentage decline. It has to be viewed as an extremely strong indication at this point, that the market cannot pullback too much at all. In the context of a lot of potential buyers currently sitting on the sidelines until they see for certain that Greece will get the next funding helpout, it suggests that we could see fresh highs for the year within a week.
Keep buying the dip, as they seem to be getting more shallow.
Clifford Bennett
US housing prices remain a non-concern, as it is clear that they have stabilised many many months ago post the sub-prime crisis. The worst is behind us on that front, and that is all we need to know. The view here since late 2008 early 2009, has always been that the US economy would recover, as it did in 2009 and now this next phase late 2011 through 2012, in parallel with high un-employment and a depressed housing market. Bith these aspects of the economy are undergoing long tern structural adjustment.
The on-going trend in economic data remains positive in the US, and while unemployment picked up a little in Italy, it hit a two decade low in Germany, so even in Europe there are signs of hope. Overall unemployment in Europe is at 10.4%, a high but managable level. This is not too different a situation to that of the US only a few months ago, and like the US, there are more reasons to be optimistic than the consensus views suggest.
Our overall view on the situation in Greece,that there would be a lot of tough talk, before arriving at an amicable solution and agreement, remain on track. Any moment now we should hear surprisingly good new on that front.
Looking further ahead the US elections are likely to have a very limited impacton markets, perhaps less than ever before. It is likely the incumbant will remain in place, and after the huge and dramatic events of recent years, from GFC to European sovereign debt, it will be difficult for a mere Presidential election in the world’s second largest economy to ruffle investors feathers too much. So suggest the overall up-trend, will simply continue to power on.
As for the short term correction, whichsome media outlets have highlighted as “longest running correction since August” well it is only 4-5 days and with only a minor percentage decline. It has to be viewed as an extremely strong indication at this point, that the market cannot pullback too much at all. In the context of a lot of potential buyers currently sitting on the sidelines until they see for certain that Greece will get the next funding helpout, it suggests that we could see fresh highs for the year within a week.
Keep buying the dip, as they seem to be getting more shallow.
Clifford Bennett
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