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Stronger or Weaker?

January 23, 2012 – 6:03 pm

There will be a plethora of earnings reports from major companies released this week such as Apple, Ford, and McDonalds just to name a few. It is not in the reports of what they earned last quarter that is of most interest to investors and traders. Rather they are looking for projections of what the various CEOs state the future looks like. Meanwhile, for the fourth quarter, the earnings thus far while up, are not very strong.

From a broader perspective the U.S. economy is getting improving estimates from economists. At the same time the IMF is calling for slower growth for the world economy.

This apparent dichotomy suggests confusion. Will Europe’s problem spread which the IMF seems to hinting at, but also will the U.S. economy get stronger while that happens? How can both be true in a world tied together. We saw that tie last year when Japan was hit with the earthquake and tidal wave. That event affecting just one country caused a worldwide slowdown. How can what is going on in Europe not affect the world economy?

I think this issue needs to be clarified before a direction in both the stock market and economy can be sustained.

Good Trading
Steve Peasley

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