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Improving News

January 17, 2012 – 6:03 pm

Obviously, traders and investors anticipated the downgrade of the various European countries credit ratings after trading hours on Friday. The stock market rose having the weekend to get use to the downgrade from S&P. Also, there was good news coming out of China with its fourth quarter GDP number reported as being 8.9% growth. That was slower than for previous quarters but better than expected. Retail sales for them in December rose to 18.1% and industrial production came in at 12.8%. To us these are very high numbers but for China they are more typical but with a clear slowdown in real estate.

In the U.S. the Empire State Factory Index rose to a reading of 13.5 for January, the highest reading since April.

The numbers support a continued rally in stocks, though the rally seems to have lost some steam. They also suggest that in the U.S. and in China growth is still the story. It is not as strong as most would like but Europe, at least so far, is not pulling the two largest economies into recession with them. If more and more people believe this then it is not likely to happen.

In the U.S. consumers are in control and if they are spending and positive about the future our economy should struggle through with positive growth for 2012 despite what happens in Europe.

Good Trading
Steve Peasley

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