We had another employment report from the government today. With the addition of some175,000 (still disappointing given where we are in the economic recovery or whatever one wants to call it). this event coincides with my stock market forecast that I authored about 2 years ago. This is what I said back then and will be followed with the accompanying note that I wrote about one year later albeit some of the commentary, it must be remembered, was done with the conditions that were in place at that time. Obviously world economic conditions due to Europe and the like did weaken the picture (although even this has improved greatly since my comments), but I was analyzing a bigger point: Stocks finished lower today but my take is that this is not necessarily due to weakening global economic conditions, indeed, growth is still fairly strong world wide especially as evidenced in Germany; moreover, the emerging markets are still strong and the U.S. economic data is showing improvement albeit more slowly then coming out of past recessions. The downturn today of the energy sector which brought down the market in general as well as other commodities was due to a surprising increase in the oil reserves as motorists are reacting to the high gasoline prices at the pump by using less of that product therefore increasing the supply; a self correction that the market usually undergoes from time to time. Going forward as long as interest rates stay relatively low (below 4.00 on the 10 year treasury) and the data stays mostly bullish look for the markets to continue to climb the wall of worry that it usually does! My prediction: S&P 1400 by the end of the 3rd quarter.
Posted on: Fri, 07 Jun 2013 17:14:15 +0000
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