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Ebb and Flow

March 28, 2011 – 6:06 pm

As the market resumed trading on Monday, worries still persisted about the nuclear situation in Japan and the unrest in Libya and the rest of the Middle East. News from both of those scenes continues to ebb and flow which increases the uncertainty that the market loathes.

The overall indexes however were higher as some analysts upgraded the telecom sector due to the merger between AT&T and T-Mobile. In addition, pending home sales also rose unexpectedly after a string of negative housing figures that has pushed sentiment back to negative in regards to the direction of housing prices here in the U.S.

As is usually the case, the market continues to climb the wall of worry coming out of a recession as improving economic numbers trump most anything the world can throw at investors. With earnings season right around the corner, the market will most likely trade modestly higher or lower over the next couple weeks, barring major disruptive global events, as investors eye earnings growth momentum coming from corporations.

Be prepared for market volatility in the short term as the global issues work their way out of our hair. At the end of the day however, earnings prevail and should drive the market higher. We are still in the expansionary phase of our economic cycle which tends to be the ultimate market factor. Be aware of this trend and keep a sharp eye on it progress towards growth. This scenario is the most critical and usually the most enduring as well.

Good Trading

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