Chinese trade data released today suggests the economic giant is still putting the economic pieces back together after disassembling them to reduce inflation. No worries, though, China will be back to strength soon enough. Of course, the market will see the import/export figures as a sign the global economy is weakening. Along with that, the Spanish government taking over its 4th largest bank will ignite a bit more fear about Europe. So, for the weather today, we will see mostly clouds with a chance of rain.
It’s a very difficult market to trade in. I’m advising my clients to just hedge out all the way into July because we are going to see some heightened volatility like today for awhile.
Yup, heightened volatility indeed is in order, as the market has no real good news to latch onto, other than the price of WTI crude is remaining below $100. In my eyes, this is a leading indicator, one that is pointing to increased consumer confidence and increased consumer spending. Just saying …
Speaking of leading indicators, for over a year now, I have suggested technology as a sector to play. Back then, I saw a combination of US economic emergence (reinvestment in technological infrastructure) and increasing use and sales of computer products, specifically, the smart phone. The numbers then were astounding, as they are today. Just look at Apple and its iPhone sales. Understand, the smart phone is not just a phone, it is a computer, and that device is now in the hands of tens of billions of people around the globe.
In 1982, there were 4.6 billion people in the world, and not a single mobile-phone subscriber. Today, there are seven billion people in the world–and six billion mobile cellular-phone subscriptions. As with many technologies, the explosion began in the world’s most developed countries.
It is an explosion indeed, the widespread use of cellular-phone technology, but the real money maker is in smart phones, and in this is the now sprouting seed of a technological spurt in both consumption and development of new products and services. The internet is coming to everyones fingertips, a portal to instant gratification, to instant consumption.
True, more folks have cell phones than smart phones. More folks all over the globe are just making calls rather than computing on their phones. This will change and rather quickly as prices drop in the smart phone world, just as they have done in the larger computer world. Given this, we should consider cell phone use as paving the way for development of the potentially massive consumer base for smart phones.
Although the large majority of mobile phones in the world aren’t yet smart phones, the “dumb phones” have established the infrastructure, payment and distribution systems, and networks that are increasingly utilized by smart phones.
Some days, the information I come across opens my eyes to the reality that the world has problems, economic and otherwise, and in the myopia of the moment, the market focuses on those as if they were omens of imminent doom. Yet, in the larger picture, it is difficult for me to imagine a doomed world when commerce is the driving force behind civilization development. No matter what the banks did in 2008 or what Iran threatens to do now, commerce keeps on going. The only difference is the modulation of the wave. Up and down it flows, but it does not go away. This is simply fact.
Trade in the day; Invest in your life …
