It's been a while since I've written but there really hasn't been much going on in the markets of late. Let's have a quick recap:
- Gas prices are still dangerously high (thanks to tensions in the Middle East) and if they stay elevated could serve to hurt our recovering economy
- Stocks have been trading in a range for the past 3 weeks with little moves up or down
- The European Union along with private investors agreed to bail Greece out of bankruptcy, therefore attempting to stabilize the European financial crisis (however the debt deal is analogous to putting a Band-Aid on a knife wound)
- Trading volume in the markets has been extremely low, and this is a troublesome sign because low volume markets have the tendency to produce selloffs in the market (this is because when investors eventually start buying or selling stocks, they do so in herds and therefore the volatility greatly increases)
- The Brazilian economy, which is one of the strongest in the world, is struggling to maintain the lackluster growth its seen over the past 6 months
- Portugal appears to be the next Greece in that the country is facing the same fiscal problems and will also eventually need to be rescued by the European Union in order to avoid a financial crisis
- Tensions in the Middle East between Israel and Iran continue to be a major problem and if they elevate and military action is taken, then that would serve to be a major headwind to the stock market (if things do get ugly over there, then cash and or gold would be a good place for investors to be positioned)
- Retail spending numbers (that were released this morning) show that consumers are spending more money and that possibly reflects a moderately growing economy (time will tell however)
- The U.S. banking industry is starting to look very attractive on the heals of the moderately expanding economy (specific financial companies that are performing well include Citigroup, SunTrust, JP Morgan, and Wells Fargo) - I continue to believe that the financial sector will be one of the top performing sectors over the next 1-2 years
That about rounds it out for what's been goin on in the markets of late. I've been putting together a stock (and Mutual Fund) watch list and I'll be posting those later today.
