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Improving Prospects

November 18, 2011 – 5:55 pm

For the last couple weeks the economic news has been improving indicating that our economy is gaining strength while Europe is losing strength. The economists are still calling for Europe to grow next year but by less than 1% while the U.S.’s GDP growth will be about 2.5% for the fourth quarter and at least maintaining that pace next year.

Of course economists are often wrong but usually they at least get the direction right. Europe is falling and we are gaining. So what about Asia? China appears to be moving away from a position of monetary tightening to loosening. Even Europe came to their senses and began lowering their interest rate, abandoning their fear of inflation; A little late in my opinion.

Our LEI (Leading Economic Indicators) report out this morning was up .9%, better than expected and up from .2% last month. This hints at a stronger economy 6 months from now. Of course without significant new jobs the improvement will be tepid.

Europe continues to dominate Wall Stree’ts reactions. At some point soon that should begin to fade for at least the short term. Also, next week the super committee will complete its work or lack of work and that deadline will pass. The market is looking for clarity and though that clarity is coming at a snail’s pace we are getting it.

Good Trading
Steve Peasley

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