Wait And Think About It
As said in an past 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 stop and refocus. In a discussion in the remarks of a previous post regarding the new Northrop Grumman agreement, this author made the subsequent comment, to the arrangement of both parties involved in the conversation, "However, you mentioned we had the biggest rally in history. That is true, and it concerns me slightly. Our recession hit a false bottom. I'm afraid that people will get too excited and we will hit a false rally. I'd like to see a slow, steady rally as we rebuild a firm foundation under it, instead of just setting up another rollercoaster ride." That is exactly what you are currently seeing.
We are stepping sideways at the moment, and then taking a step or two back to take a look at what we are at present doing. That is healthy and, albeit odd to admit, promising. Investors have been courageous but clever and it paid off for three months in a pleasant rally. Investors are at the moment backing off with the reports that the signs of financial growth have stalled and will need more rock-hard evidence of rally before growing further. With the fear of rising interest rates, inflation, the slowing down value of the US dollar and increasing commodity prices, it is understandable and healthy.
The slipping dollar and inflation are wordlessly robust concerns. Reservations over government arrears (partially created by the complete TARP debacle) 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 efforts by the Federal Reserve to trump inflation and you have a very shaky 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 allows the economy to even out and develop under the new recovery previous to starting another one and gives the state time to begin giving the dollar financial CPR and gives the Fed to manage interest rates and inflation. Each person wins.
"A sideways 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 control and that a minor pullback is in order to recapitulate and coagulate before moving at all further. The S&P 500 index ascended 40% ever since March, something that usually takes years to accomplish. That is massive and requires a fit break to gauge the situation and look for helpful news prior to pressing on.
The major indexes stirred less than 1% last week, creating a pleasant rigid halt. "I'm tending to take the economy action the last two weeks as reasonably positive," said Uri Landesman, from ING Investment Management global growth strategies. - 23208
We are stepping sideways at the moment, and then taking a step or two back to take a look at what we are at present doing. That is healthy and, albeit odd to admit, promising. Investors have been courageous but clever and it paid off for three months in a pleasant rally. Investors are at the moment backing off with the reports that the signs of financial growth have stalled and will need more rock-hard evidence of rally before growing further. With the fear of rising interest rates, inflation, the slowing down value of the US dollar and increasing commodity prices, it is understandable and healthy.
The slipping dollar and inflation are wordlessly robust concerns. Reservations over government arrears (partially created by the complete TARP debacle) 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 efforts by the Federal Reserve to trump inflation and you have a very shaky 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 allows the economy to even out and develop under the new recovery previous to starting another one and gives the state time to begin giving the dollar financial CPR and gives the Fed to manage interest rates and inflation. Each person wins.
"A sideways 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 control and that a minor pullback is in order to recapitulate and coagulate before moving at all further. The S&P 500 index ascended 40% ever since March, something that usually takes years to accomplish. That is massive and requires a fit break to gauge the situation and look for helpful news prior to pressing on.
The major indexes stirred less than 1% last week, creating a pleasant rigid halt. "I'm tending to take the economy action the last two weeks as reasonably positive," said Uri Landesman, from ING Investment Management global growth strategies. - 23208
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posted by X - Men @ 4:54 AM
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