Looking For Inspiration

Ulli Uncategorized Contact

So much for Friday’s feel good rally. There was absolutely no upside follow through on Monday, and the major averages headed straight down with an occasional uptick (see chart; courtesy of marketwatch.com).

While the government report on personal income and spending was in line with estimates, there had been hope for a surprise to the upside. Dashed hope turned into disappointment and down we went.

The bulls looked hard but there was no inspiration to be found anywhere; au contraire, concern about the economic health of Europe was pushed to the front burner again. Massive government spending cuts (that’s a good thing) will translate into less economic growth, which will affect those companies that generate a big part of their revenue outside the U.S.

The bottom-line is that the upcoming economic slowdown will be global in nature and not just limited to any one country, which means we are all connected at the hip and in this together.

Sure, there will be rebound rallies, but right now I still maintain that, barring sudden incredibly good news, the path of least resistance will be to the downside supporting being long in bond ETFs/funds for the time being. Plan accordingly.

Contact Ulli

Leave a Reply