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January 31, 2011 – 5:55 pm

Last week’s Middle East Crisis peaked on Friday in Egypt, and though the issue has not run its course, the stock market here in the U.S. bounced this morning after Friday’s deep one day fall. It certainly appears that the magnitude of the fall cannot be ‘only’ attributed to the turmoil but rather some of it has to be due the strong run up in stock prices over the last two months as the market became overbought. That situation needs to be worked off and even a one day sharp selloff may not be enough.

This morning’s economic data gave strong evidence that the economy is gaining strength. The Chicago PMI was up to 68.8 for January which was up from 66.8 from last month. The expectation was for it to fall a couple points. Personal income and spending were up as well. Spending was up a more than expected .7% and income was up .4%, in line with expectations.

Inflation also is and has remained tame. In fact there is a little more concern about deflation though I doubt that will happen as the world economy continues to expand.

The news media is harping on the possible spread of the Middle East unrest and that is always possible, but if it does will it spread to the oil rich countries whose citizens receive huge government assistance? I doubt it. If it spreads it will be into poor countries. Economically that will mean very little for the rest of the world. Make no mistake this unrest is all about the poor economics not

Good Trading
Steve Peasley

  1. One Response to “Unrest”

  2. Seems like any pullbacks due to overseas drama is a good buying opportunity…. but in the back of my mind I can’t fight the feeling that drama is going to be knocking at the door of the US at some point.

    By Nick on Jan 31, 2011

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