I took a drive today just about to the border of France. This part of northeast Spain is a beautiful combination of old and new. I stopped into some “medieval” towns, and if you walk away from your car until you can’t see it, you might just think you stepped back in time …
I am not sure anymore what it will take to get investors back into the market. Greece is working toward a solution, the EU just had 25 of 27 countries sign onto the new stricter EU economic accord, the ECB has stood up twice now to the tune of a trillion dollars to shore up the European banks, and Asian and U.S. economies are picking up a head of steam …
- European shares and the euro reversed early losses on Thursday as the impact of the latest massive cash injection by the European Central Bank lifted sentiment, overwhelming fears that further U.S. monetary easing could be on hold.
- New factory orders for Asia’s manufacturing powerhouses perked up in February. China’s factories grew more than expected as new export orders for big firms bounced back.
- Top retailers such as discounter Target Corp, department store chain Macy’s Inc. and Victoria’s Secret parent Limited Brands Inc. reported same-store sales gains for February that handily beat Wall Street forecasts.
- New U.S. claims for unemployment benefits edged down last week, holding near four-year lows, suggesting the labor market was gaining momentum
- A surprising sales gain by General Motors Co and strong performances by Ford Motor Co and others helped push U.S. February auto sales to their highest annual sales rate in nearly four years.
- House prices rose more than expected in February, data from mortgage lender Nationwide showed on Thursday following other recent economic news that suggested the economy had found a path back to health.
It seems to me that everything is heading in the right direction, so why the continuing investment in government bonds? Do the big boys and the retail players know something I don’t know? As you can see, the lack of investment in U.S. equities perplexes me. Then again, perhaps those folks at the big investment houses are actually taking their responsibility to their clients seriously. After all, one could view all of the good stuff another way.
Greece, Spain, Italy, and the rest of the EU are far from getting their fiscal houses in order and the ECB is signaling strongly that it might be near the end of its lifeline lending. The beginning of 2011 started strongly as well, but then came the oil spike, the destruction of northern Japan and the ensuing collapse of the global industrial supply chain, and the bad weather causing food prices to spike. Political upheaval in the Middle East caused governments to fall and political upheaval in the U.S. caused the first ever credit downgrade also tipped the scale away from the good beginning. As well, the U.S. housing market seems to be improving, but it has a long way to go before it is healed completely. China’s economic rebound is a double-edge sword. With the increase in economic activity comes the threat of excessive inflation. Okay, maybe I do get it, after all. Maybe all we need is more time, just to make sure all is as good as it seems.
Trade in the day – Invest in your life …
