FFA offers:
* A free appointment.
* Free presentations to groups about Socially Responsible Investing.
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
Talk of a double-dip recession have increased; however, most analysts are optimistic that economic growth will remain positive (however low) and thatt the stock market appears relatively attractive. While volatility will continue, alternatives to stocks are relatively unattractive.
Yields on bonds are near all-time lows, while interest rates on cash deposits remain at virtually zero. Meanwhile, the dividend yield on the Dow is approximately 2.9%, greater than the 10-year Treasury yield of approximately 2.5%.
Initial jobless claims remain stubbornly high, with a recent reading again hitting the 500,000 mark, the highest level since November of last year. In addition, housing also continues to languish. One of the major keys to is for confidence in the economic system to return.
Positive news also exists, the Index of Leading Economic Indicators (LEI), which posted a 0.1% gain in July and are still in territory indicating economic expansion.
Many emerging markets tend to have their growth tied to economic prospects in China, which has been a primary source of global growth. While exports are an important part of the Chinese economy (but could slow in coming months), fixed investment is the highest percentage of China's gross domestic product (GDP) at nearly 50% in 2009, propelled by property construction and government stimulus spending on infrastructure.
Infrastructure and property construction in China is expected to slow over the near term as government stimulus levels off and the housing market is affected by measures intended to cool speculation.
Businesses allowed inventories to plunge so they could conserve cash given high uncertainty during the recession. As a result, the global recovery was driven by manufacturing and exports, benefitting from inventory building, as well as low levels of positive demand.
The European Central Bank (ECB) remains opposed to providing stimulus, barely budging even in the face of a market riot over government debt in the second quarter.
Double-dip recession fears have created demand for the safe-haven status of the US dollar. Additionally, the euro worked off some of the sharp rebound after plunging amid the euro-area debt crisis this year.
Headlines
Existing home sales hit their lowest level in 15 years
New home sales came in below expectations
Manufacturing was weaker than expected.
GDP was revised to 1.6% from 2.4%
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