First things first … You should be on vacation. You should be out in the world enjoying yourself. You should be sitting in a restaurant atop an old wooden pier with a view of an ocean at sunset, watching seals lounge on wooden docks made specifically for them to gather as a family at night, and hearing the tinkle of glassware moving about combined with the gentle murmur of quiet conversation all around. If you were doing the above or doing some equivalency in feeling of the above, than you are on vacation, not worried about the daily machinations of the market this August.

Come September and October, the energy of the market will change considerably and then you will have a clearer mind to deal with the coming energy flow, a flow mixed with the negative of the US politicos performing like trained seals for their constituencies and the positive of the global economy changing for the better.

  • Eurostat, the European Union’s statistics office, said the 17 EU countries that use the euro saw their collective economic output increase by 0.3 percent in the April to June period from the previous quarter. That’s the first quarterly growth since the Eurozone slipped into recession in the last three months of 2011.

The above is some good news, is it not? Imagine for a moment, as you enjoy yourself in that Oceanside restaurant, an economic reality with the largest economy on the planet ramping up to take its rightful place as the leader of the pack.

  • The recovery in Europe, the world’s largest trading bloc, is expected to cause an increase in global trade levels later this year as big exporters like Germany gather pace and Europeans buy more products from companies in the U.S., Japan and elsewhere.

The EU is coming back. Led by the biggest kids, the economic momentum is shifting, but it is the bad kids we need to watch to make sure the pack is holding together.  

  • The improvement was largely due to solid growth of 0.7 percent in Germany and a surprisingly strong 0.5 percent bounce-back in France following two quarters of negative growth. Aside from Europe’s top two economies, there were signs of stabilization elsewhere, notably in Portugal, which expanded by a surprising 1.1 percent. Spain and Italy saw the pace of their economic contractions slow.

Good news is good news, no matter what the doom and gloom folks say. The fact that the EU moved into positive territory is the focus at hand, not the fact that the EU still has issues. Heck! We all have issues, but that does not mean we cannot celebrate (or invest in) that which is good in ourselves.   

  • “While the return to economic growth in the Eurozone is a welcome development, it would be wrong to think that it will bring an end to the travails of the highly indebted and uncompetitive countries of the periphery,” said Jonathan Loynes, chief European economist at Capital Economics.

Booooo! Chief European economist or not, you won’t take away my good feeling when sitting in a restaurant watching an orange sun move slowly into the blue sea. Nope! I am on vacation and your dreary view of the world will not make me miss even a minute of the vintage moment.  In fact, you can stay in your negative world, while I visit yet another positive thought about the global economy.

  • The argument for investing in China has always been based on growth. After all, the People’s Republic has grown its economy by about 10% a year since 1979. Even after slowing substantially in the recent credit crunch and global economic downturn, China’s economy is expanding by more than 7% a year. Even so, the world’s second-largest economy may be reaching a turning point, in which it shifts from growth powerhouse to undervalued maturity.

A stable China, a resurgent Europe, Japan seeing its sun rise again, growth in Eastern Europe, the Americas finding their way back to stable currencies and contained inflation, and big companies turning lots of profit makes me happy, and it will make the market happy for some time to come.

  • Deere & Co reported a much higher-than-expected quarterly profit on Wednesday as strong sales of its tractors and harvesters to farmers in the Americas offset the construction industry’s continued weak demand for earth-moving equipment.

Watching the seals lounge atop one another on their manmade wooden beds, hearing them bark to call one another home from dinner, seeing each greeted with nuzzles and hugs as they emerge from the water, eating good food, looking at a picturesque harbor filled with moored sailboats, enjoying the soothing warmth of a cocktail at sunset …

Wow! I love vacation.

Trade in the day; Invest in your life …

Trader Ed