Market Update

It appears that the market correction that started in the beginning of the year has run its course, and at this time around the infamous anniversary of 2009 multi-year market lows, the markets are on the rise again.  This year, the economic reports were mixed; they are never overwhelmingly positive in any recovery and this one was no exception.  Some disappointing showings in housing market statistics and new unemployment claims earlier this year, as well as the Greece debt crisis were major catalysts of the correction.  But the latest statistics and especially the Friday unemployment report alleviated the fears.  The Greece situation appears to be at least temporarily under control, but I don’t think that’s the end of it.  There are other countries in the PIGS world (Portugal, Ireland, Greece, Spain) that also have potential to shake the markets with the news of their debt issues; the euro is likely to continue to be pressured against the dollar.

Still, there are many reasons to be optimistic about the markets in 2010, although no one expects repeat performance of 2009.  Most of the stimulus money is still not spent, corporate earnings continue to surprise on the upside, inflation and interest rates are low, and apparently unemployment rate has peaked.   Regular corrections are quite normal during the upward movement, and I don’t think this market is going to be different in this regard.