Stop Think About It
As said in an previous article, from time to time the best movement is standing still. As true as that is, after the three month economic rally we've seen, it's time to halt and refocus. In a talk in the comments of a previous post concerning the new Northrop Grumman contract, this author made the following comment, to the agreement of both parties involved in the conversation, "However, you mentioned we had the biggest rally in history. That is right, and it concerns me a little. Our slump hit a fake bottom. I'm afraid that citizens will get too eager and we will hit a insincere rally. I'd like to see a sluggish, steady recovery as we restore a firm base under it, instead of just setting up another rollercoaster ride." That is precisely what you are currently seeing.
We are stepping to the left at the moment, and then taking a step or two back to take a look at what we are at present doing. That is healthful and, albeit odd to admit, encouraging. Investors have been plucky but clever and it paid off for three months in a pleasant rally. Investors are now backing off with the news that the signs of economic growth have slowed down and will need more solid evidence of recovery before going further. With the fear of rising interest rates, inflation, the falling value of the US dollar and rising commodity costs, it is understandable and strong.
The slipping dollar and inflation are wordlessly robust concerns. Reservations over government arrears (partially created by the complete TARP mess) that has began to lead to a little further printing is beginning to drop the worth of the dollar. Merge that with fears of inflation or a increase in interest rates by reason of impending labors by the Federal Reserve to trump inflation and you have a very unsound economic system on which to run a stabilizing market. Be encouraged, however, because investors are doing the right thing and the economic slowdown after a hefty rally is a great, healthy thing. This gives the economy to even out and build under the new rally ahead of starting another one and gives the state time to begin giving the dollar financial CPR and allows the Fed to control interest rates and inflation. Everyone wins.
"A askew move in the economy is in fact a corrective move. You dispose of the overbought state when you move sideways," said Keith Springer, leader of Sacramento-based Capital Financial Advisory Services. Analysts and experts warn that the rally was a bit too much for the economy to deal with and that a small pullback is in order to recap and harden before moving at all further. The S&P 500 index ascended 40% ever since March, something that usually takes years to accomplish. That is gigantic and requires a fit break to weigh up the situation and look for constructive news prior to pressing on.
The major indexes moved less than 1% last week, creating a nice solid halt. "I'm inclined to take the market action the last two weeks as reasonably positive," said Uri Landesman, from ING Investment Management global growth strategies. - 23218
We are stepping to the left at the moment, and then taking a step or two back to take a look at what we are at present doing. That is healthful and, albeit odd to admit, encouraging. Investors have been plucky but clever and it paid off for three months in a pleasant rally. Investors are now backing off with the news that the signs of economic growth have slowed down and will need more solid evidence of recovery before going further. With the fear of rising interest rates, inflation, the falling value of the US dollar and rising commodity costs, it is understandable and strong.
The slipping dollar and inflation are wordlessly robust concerns. Reservations over government arrears (partially created by the complete TARP mess) that has began to lead to a little further printing is beginning to drop the worth of the dollar. Merge that with fears of inflation or a increase in interest rates by reason of impending labors by the Federal Reserve to trump inflation and you have a very unsound economic system on which to run a stabilizing market. Be encouraged, however, because investors are doing the right thing and the economic slowdown after a hefty rally is a great, healthy thing. This gives the economy to even out and build under the new rally ahead of starting another one and gives the state time to begin giving the dollar financial CPR and allows the Fed to control interest rates and inflation. Everyone wins.
"A askew move in the economy is in fact a corrective move. You dispose of the overbought state when you move sideways," said Keith Springer, leader of Sacramento-based Capital Financial Advisory Services. Analysts and experts warn that the rally was a bit too much for the economy to deal with and that a small pullback is in order to recap and harden before moving at all further. The S&P 500 index ascended 40% ever since March, something that usually takes years to accomplish. That is gigantic and requires a fit break to weigh up the situation and look for constructive news prior to pressing on.
The major indexes moved less than 1% last week, creating a nice solid halt. "I'm inclined to take the market action the last two weeks as reasonably positive," said Uri Landesman, from ING Investment Management global growth strategies. - 23218
About the Author:
Learn more about keyword #1. Stop by Jennifer McClelland's site where you can find out all about investing and what it can do for you.
posted by X - Men @ 5:39 AM
0 Comments
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home