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Shaky Europe

May 7, 2012 – 5:01 pm

Elections in Greece and France pushed the political climate in a direction that may endanger the austerity programs and for Greece may result in an exit from the European Union. The voters in those countries are rebelling against spending within their means something we in America seem to have forgotten as well. Regardless, the result is uncertainty and stock markets dislike that uneasy feeling.

Late in the week we will be getting Chinese data on inflation. Why is that important? With Europe producing uncertainty, a rise in inflation in China could do the same thing in that region. Recent numbers are a little high but much reduced from a year ago. As inflation has come down China has moved to a stance of easing their grip on their economy. That will help offset the unease going on in a weak Europe.

Investing is a global activity and what is happening in major economies around the world is very important for our stock market. In our own economy it does not help that we are not producing enough jobs. The world economy is growing but at a reduced pace, not unlike our own. Then again expectations are reduced so our stock market need not go down. In fact, this morning, despite the European elections and with the majority of the Euro zone in recession our market is holding up very well.

Good Trading
Steve Peasley

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