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Please contact us for a free meeting with no obligation.
Financial Freedom Associates, LLC
2531 E Richards Place
Tucson, AZ 85716
Email: info@ffafinancial.com
Phone: (520) 325-0769
Market Overview
Economic data has been largely stabilizing and talk of a double-dip recession has lessened—though risks still remain. Economic expansion is expected to continue at a sluggish pace as the market is expected to continue to grind higher.
Stocks got off to a solid start in September after a surprising solid reading on the manufacturing sector. Expectations had been lowered after a couple of disappointing regional reports, opening the door to an upside surprise.
That doesn't mean that risk is gone and the economy is in the clear. The unemployment rate remains stubbornly high—continuing to show readings between 9.5-10% as businesses remain reluctant to add to payrolls.
Companies show signs of increasing confidence which is critial to the recovery process. And while the recent small-business survey continued to show optimism at dismal levels, there are signs confidence is slowly returning to the boardroom. Some businesses are starting to put to work some of the glut of cash they hold on their balance sheets.
The Fed clearly stands ready to implement another round of easing, which may not be necessary. Meanwhile, election season is in high gear and confidence may build after the results are known. The market generally likes gridlock - which split control brings.
Recent Fed comments indicate that the Fed clearly stands ready to implement another round of quantitative easing, to the extent economic conditions so justify.
While the Fed is doing everything it can to enhance confidence, businesses continue to cast a skeptical eye toward Washington. Uncertainty regarding the regulatory environment, the costs of doing business, and whether tax rates will be increasing at the start of 2011, all have businesses largely sitting on their hands.
China continues to grow but efforts to slow the property market continue, while Europe's debt problems appear contained.
The all-important Chinese markets are also likely to have an eye on the political situation as pressure from the United States is building for China to revalue its currency, and protectionist sentiment is building.
Europe remains a source of anxiety. The poor financial health of the PIIGS (Portugal, Ireland, Italy, Greece and Spain), which have large deficits, high debt, or a mixture of both, came into focus when Greece doubled the estimate of its 2009 deficit.
One unifying subject among all countries is the continued apparent race to devalue their respective currencies—though most countries, including the United States, will not explicitly state that as a goal.
Headlines
Consumer confidence fell to 48.5, lowest this year.
Jobless claims fell 16k in September to 453k.
2Q GDP revised from 1.6% to 1.7%.
Durable Goods fell 1.3% in August.
Housing data improved but remains at low levels.
US to sell off its AIG stake under new plan.
Ireland in focus as European debt turmoil continues.
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