Greek debt has moved to the backburner, the talk of a double-dip recession is on hold, and China seems to be the forgotten economy. The remaining spook under the bed is the U.S. and its debt ceiling argument, and for now, for the moment, the market seems to think the spook under the bed is Casper The Friendly Ghost. I suggest this lack of apprehension will change in the coming two weeks, unless the parties at hand in this argument quickly come to some agreement that raises the debt ceiling. In the meantime, however, the market is pumping on all cylinders to erase the losses of May and June.
For the fifth straight day, equities are moving up. What the heck is going on? Oh yeh, I already mentioned what is going on in the first paragraph – excessive worry is coming out of the market. One contributor to the loss of worry is the continuing spate of economic indicators that point to the “soft patch” ending and a second half rebound in the economy.
The Institute for Supply Management’s manufacturing index rose to 55.3 from 53.5 in May. The index had its sharpest one-month drop since 1984 in May as a shortage of auto parts from Japan and high gasoline prices cut into spending.
On the other hand, the consumer is not quite convinced that worry is not necessary.
Consumer sentiment worsened in June on jitters about the economic outlook and spending is likely to remain lackluster in the long-term, a survey released on Friday showed.
I suspect this will change once the breathless media moves on from the sensationalism of the former IMF head and his legal problems. I suspect as more indicators point to a second half economic recovery, the tone of the pundits and analysts will move more toward positive than negative, which, of course, will move consumer sentiment in the right direction. We will see.
For me, though, the glass is most always half full, which means I look for the good. The excerpt below is something that speaks to the good. In fact, it speaks to the really good, and it points to the major, historical transformation I have written about before. It is one more piece of evidence that feeds my belief that our dependence on oil will end sooner rather than later.
General Motors Corp announced plans this week to develop its first natural gas-powered engine, overcoming its long aversion to alternative fuels and joining a host of smaller players working to put natural gas in car engines.
The American innovative spirit is alive and well. The above underscores the reality that America is indefatigable when the climb up from the depths is most tiring. Just one short year ago, GM looked moribund and defeated. Today, the former icon of America’s industrial strength is stepping up to lead the charge toward alternative fuel for cars, our way, once again, to independence from a tyrannical overlord. I say, Happy Independence Day, America …
Trade in the day – Invest in your life …
