It occurred to me this morning as I was reading that aside from the potential but not guaranteed uncertainty that might arise this summer when the US politicos do their now offensive dance, and the occasional news driven “correction,” I see nothing obvious that could seriously derail US economic momentum or the market. True, North Korea, Iran, Israel, Syria, and the unknown pose geopolitical threats that could easily cause both the US economy and the market to jump the tracks, but those threats are what they are – unpredictable.
On the global front, China has had and still has its economy under control and so it will continue to contribute to the global economic momentum. In order, the two problem children are Europe and Japan, at least in the “developed” economies of the world. The former is obviously more problematic than the latter, but both hold the potential to hinder or help global economic momentum. Thus, aside from the aforementioned political nonsense, the ongoing economic rehabilitation of Europe and Japan, and the geopolitical unknown, I see little in the way of a long-term market rally. Of course, my “prediction” is not new. My quixotic campaign against those who suggest otherwise has been long and true, but, alas, I am tiring from the battle.
I need to find interest elsewhere and potential opportunity wherever I look. In fact, I would like to know more about the emerging economies of Latin America, you know, that place of burgeoning political and economic power that has drawn the political eye of the Catholic Church and is producing GDP growth at a pace that is the envy of Europe, Japan, and the US.
- The IMF predicts the region’s combined gross domestic product will expand at a rate similar to that of the world, which it sees expanding by 3.5%. Latin America’s forecast is also better than the IMF’s projection for a 1.4% expansion in advanced economies.
Yes, I would like to know more about the growing economic and political influence of this region, as there must be tradable opportunities. Which US companies, for example, are doing business there and how are those companies doing? What is going on in Brazil and Mexico, the one-two economic punch in the region?
- The IMF projects Brazil will expand by 3.5% this year, at the same pace as the Mexican economy, the region’s second largest.
Yes, I need a different perspective. I have become quite myopic in my focus on the now daily reality of the market. All I seem to see is the back and forth between the bulls and the bears. All I seem to do is send my well-meant meanderings into the mounting maelstrom of market mulling.
- For every positive or bullish commentary, there’s an equally bearish or pessimistic take. These aren’t off-the-cuff quips either. These are well-reasoned arguments for and against the market.
Well, maybe not all are “well-reasoned” arguments, but many are, and that is what is tiring. I know, I know, the argument between the bulls and the bears is what makes a market, but sheesh, maybe we all need to take a break from the constant back and forth, as the market is surely reacting – up and down, up and down …
Apparently, I am reflective this morning. The gloomy, fog-softened light coming through my French doors might be the reason or maybe, I am just looking to change my writing flow, or maybe I long for another. Whatever it is, I sense I need to turn away from the debate, at least for a moment or two. Yes, I sense that, but can I? Am I able to “turn it off?” Can I avert my eyes from my daily reality and cast them south toward a region offering new economic debates, new arguments about GDP growth, protectionism, political meddling, and the fear of inflation? Maybe, but let me finish this writing with just a tiny bit more about the argument here.
- Contracts to buy previously owned homes fell in February, held back by a shortage of properties, but there is little to suggest that the housing market recovery is stalling. Still, contracts last month remained at the second highest level in nearly three years. The Realtors group blamed the pullback to a shortage of homes for sale. The supply squeeze is helping to push up home prices, putting a solid foundation under the housing recovery.
Did I read that right? There is a shortage of inventory of previously owned homes? How can that be? I mean just this past January, I read that another foreclosure storm was coming, a storm that would dump a heap of “used’ homes onto the housing market. I read that the “shadow” inventory of millions would finally swamp the market as banks began the foreclosure process again after all the halts for whatever reasons.
- Shadow inventory of homes fell 18 percent year-over-year in January to 2.2 million units, according to CoreLogic’s latest report. This represents nine months’ supply. It was down 28 percent from its 2010 peak of 3 million units. The value of shadow inventory stood at $350 billion, down from $402 billion a year ago.
Okay, the inventory is still too large, but it is declining enough to affect the median price of homes across the US. Along with the fact that US consumers (and investors) are stepping up to buy existing inventory, this is another indicator that the US economy has few barriers left to halt its forward momentum.
Gimme a break. Do you think it easy to just walk away, find another to sate my need for interest? Besides, something tells me there just might be some interesting things coming to a market near you soon enough …
- Investor’s Intelligence reports that Bullish Sentiment rose on the week to 49.5% from 47.4% (50.0% two weeks ago). Bearish Sentiment rose to 19.6% from 18.6% (18.8% two weeks ago) and those expecting a correction fell to 30.9% from 34.0% (31.2% two weeks ago).
Trade in the day; Invest in your life …
