The Recession is Over (Word)
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February 18, 2011 Market outlook is positive and looks to remain so far the first half of 2011. American stocks will continue to build on previous gains with market reaching their highest levels since 2008. The trending pattern since last September has been strong with pullback that has proven only to be hiccups along the way. As sentiment continues to swing, minor bouts of selling along with technical correction will be a common theme in 2011. However, markets will pullback 2% a session due to nervousness over equities among investors and pullbacks are short lived with little depth. The resilience of the equity markets has frustrated the doom- sayers. Tension in the Middle East is only rising sovereign debt and inflation add to the wall of worry. Near term weakne ss in the market will only create opportunity to target investment allocation. For the doom-sayer under exposure to equity markets will bring returns down. Economic expansion has officially begun now that markets are above pre-recession levels. Historical data shows that economic expansion phases last about 3 years. Fourth quarter earnings season was a winner overall with 75% of corporation beating analyst expectations. Manufacturing continues to be the leader as the Chicago Purchasing Managers index rose 68.8%. The highest since July 2008. Nationally, the Institute of Supply Management (ISM) index rose to 60.8% in January. The highest reading for ISM index since May 2004. More impressive is that new orders rose to 67.8%. The best reading in seven years. Conversely, employment hit its highest mark in 38 years. Solid strides are being had in the service sector as well with ISM non-manufacturing survey readings of 59.4. Readings above 50 indicate economic expansion while a reading near 60 indicates strong economic growth. www.ahmetjakupi.com 519.570.4754 416.477.8998 America is showing strong economic signals backed by solid earnings. Over optimism will create pullbacks as sentiment escalates too quickly but overall market sentiment in America has shifted to optimistic. The Federal Reserve will not act on concerns of rising inflation. Treasure yields have already risen in response to headline inflation from the commodities sector. European markets have rebounded with Germany leading. Expect the sovereign debt crisis to continue in the Euro zone. Emerging markets will have to battle inflation and develop tighter policies.
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