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This article is contributed by Pinnacledigest.com. One of the TOP sites for more up to date information on the Canadian and US Stock Markets. For more information subscribe to their free newsletter.
Dear member,
The Dow rallied 120 points in the final hour of trading Friday on speculation
the EU will bail out Greece and Spain as soon as this weekend. In addition, The
Federal Reserve reported that consumer credit declined in December by $1.7 billion.
Unemployment in the US dropped to 9.7% as 11,000 workers were added to payrolls
in January. This is the first increase since January 2007 and the biggest since
April 2006. Make of it what you will, just be aware of the seasonal hiring
increase which played a major role in the 'positive numbers'.
The US economy is expanding and recovering, but is it sustainable?
The rules and parameters of the game have changed as our debt balloons and we
continue to print and lend money at levels never before seen or even imagined.
Bernanke and the Obama camp are attempting to pull off one of the greatest
balancing acts in the history of monetary systems. What's at stake is the long
term health of the US dollar, which more than likely, all or most of our assets
are directly or indirectly tied to.
President Obama has projected a record $1.56-trillion US
government deficit for 2010. This is following a $1.4 trillion deficit in 2009.
The 2011 deficit is predicted to be $1.3 trillion. Deficits are expected to
remain above $700 billion for the rest of the decade, according to the
projections. These predictions were taken from Bloomberg.
Obama has a plan and is hopeful our economy can slowly but surely
dig itself out of unfathomable debt. We're here to help prepare you if he and
his supporters running the US government and the Fed fail. So why is it that even amidst a week when President Obama stated
plans to expand the US deficit exponentially, the market finishes strong?
Fundamentals are moving the markets back up. The ISM's (Institute
for Supply Management) Manufacturing Index came in at 58.4 for January. This
was a significant and dramatic rise from December which came in at 54.9. It was
also the fastest monthly growth in US factory output since August 2004.
Our team at Pinnacle has long spoken about the Manufacturing Index
numbers and how important it is to the US economy and overall market sentiment.
Whenever the number is above 50, GDP is almost always expanding and the markets
are usually following suit. Economic activity in the manufacturing sector
expanded in January for the sixth consecutive month - positive fundamentals
that can't be ignored. The overall economy has grown for the ninth consecutive
month.
The Institute for Supply Management's official website gives
excellent monthly breakdowns.
HERE'S WHAT RESPONDENTS ARE SAYING...
* "Commodity prices are moving up again." (Printing
& Related Support Activities)
* "We now believe that we will not have a good upturn until
the 3rd quarter of 2010." (Primary Metals)
* "Overall activity is significantly higher than we typically
see this time of year." (Machinery)
* "Orders from automotive very strong." (Electrical
Equipment, Appliances & Components)
* "Lead times continue to be a problem for
electronic components." (Computer
& Electronic Products)
View the detailed report and more commentary at:
http://www.ism.ws/ISMReport/MfgROB.cfm
All the best with your investments.
PINNACLEDIGEST.COM
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