Thursday, September 2, 2010

Have you followed the economic news lately?

Things aren't that bad after all! Unemployment claims are down in the U.S. over the last 2 weeks. Uh? What? Oh and the European Central Bank announced that economic growth has increased from 1% in June to 1.4% today and sees future growth at 1.6%. What European credit crisis?

2nd quarter corporate earnings in the U.S. were better than expected. However the constant fretting about the economy has made consumers a bit more pessimistic (surprised?) and energy prices moved down so Canadian earnings were a bit less than expected.

And now the U.S. factory sector grew faster than expected in August.

"We're in the middle of what is typically a growth scare, where the economic cycle slows down after an initial run up as stimulus fades and we transition from stimulus to having the economy standing on its own," said Jason Pride, director of investment strategy at Glenmede Investment and Wealth Management in Philadelphia.  I have no idea who Jason Pride is, but a lot of my experienced friends in the oil patch have recently little trouble to get jobs. That is a sudden turn-around; just a month ago everyone felt pretty down.

So, are we going to boom suddenly? Not likely but there is light at the end of this depressing quarter's dark tunnel. Probably Ken Fisher's statement that things are always different than the masses expected will be proven right again. September and October markets may surprise us on the positive side. As Don Campbell of REIN always says: "Ah... the W" (well I paraphrased, Don never says 'Oh... and Ah... ').

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