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What’s Next?

January 13, 2012 – 6:13 pm

There was little economic news released this week as earnings season gains traction. On the earnings front disappointment came from the banking sector. J.P. Morgan earnings were less than anticipated and the fear is that the banking sector may be weaker than expected. Banks are under attack from all sides: investors, prosecutors, and regulators to say nothing of increasing foreclosures so the prospects for the banking sector are not bright.

Yesterday Italy and Spain had a very successful bond offering with interest rates falling. They were able to sell all the bonds they wanted. That was a relief as billions of Euros in sovereign debt will be coming due in the next few months. Refinancing that debt has been very much in doubt or at least at a rate that is sustainable. Rates fell sharply. You could hear the relief in Europe from here.

Next week will give us a little more clarity on earnings and the prospects of growth in earnings looking forward. No matter how good or bad they will be everyone is looking over their shoulder at Europe and China. That is not going to change.

Good Trading
Steve Peasley

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