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Looking for Signs

December 14, 2009 – 10:18 am

This morning’s buyout of XTO by Exxon Mobil at $41 billion may just be the start of a flurry of buyouts in the coming year. The balance sheets outside banks are extremely healthy with cash. With well over $1 trillion dollars these companies need to do something with that cash. History suggests mergers, buybacks and spending on expansion or productivity enhancements. Next year will see some of that money spent and that should mean good news for the economy.

On the economic front this week we will have inflation news in the form of the CPI and PPI reports, housing starts for November and the release of leading economic indicators for November. These are important reports which provide a hint of the future.

The stock market is in a holding pattern waiting for evidence of further strength while it still worries about debt issues outside the U.S.  Dubai had some good news over the weekend, but debt worldwide is going to be a concern.

Good Trading
Steve Peasley

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