Market Update

With the exception of news coming from the Euro zone regarding Greek and now possibly Portuguese debt problems, the economic environment this quarter continued to be quite benign.  We had generally positive reports on retail sales, housing market, and consumer spending, while the unemployment remains high.  Some analysts talk about “tortoise market”, referring to the fact that the since the end of January correction, markets moved very slowly but very steadily upwards.  The infamous VIX index, also known as the fear gauge, which measures market volatility, has been consistently trending down and now is at the level of mid-2007.  It appears that there is some complacency in the market, which in itself should warrant caution.  On the other hand, many still view this rally and recovery with considerable skepticism, and fund managers have cash available to invest, which is a positive sign.  While my outlook for the rest of this year remains positive, I would not be surprised to see another correction similar to the one experienced in January.