Positives on the Economy and Market

I don't believe there's ever a free lunch in this world. But, I remain on the side of the market and economic bulls nonetheless. I think the economic recovery is ongoing and that the US, along with other developed economies, is experiencing a somewhat natural soft patch within an admittedly mild recovery.

Liz Ann Sonders, Chief Investment Strategist of Charles Schwab, is well respected by many on Wall Street. In a recent article she highlighted some positives for the recovering economy and stock market that I thought I’d share with you:

Economy's strong points

•Manufacturing remains well in expansion territory, with booming industrial production.

•Leading economic indicators turned back up for the second consecutive month. 

•The savings rate is a healthy 6%. 

•Commodity prices are surging, suggesting strong global growth and trade.

•Initial unemployment claims have moved back down. 

•Home prices are up more than 3% from a year ago, and housing starts and pending home sales are tracking higher.

•Personal income and spending are both tracking higher.

•Retailers are beating sales forecasts, as consumer spending increased significantly in August.

•Construction spending surprised on the upside. 

•Housing affordability is near all-time highs.

Stock market's strong points

•Last month's gain was the second-strongest September for the S&P 500® index (historically, that's been a good sign for fourth-quarter performance).

•The majority of S&P 500 stocks are above their 200-day moving average. 

•Market breadth is bullish.

•The market is entering its election-cycle sweet spot (typically from the midterm election through the third quarter of the pre-election year). 

•Venture capital investment is up nearly 50% this year, while initial public offerings are in vogue again (young firms have accounted for 11% of private employment). 

•Merger-and-acquisition (M&A) activity is booming again.

I believe part of my job is to look at a broad range of credible points of view, not just those who shout the loudest or take the most extreme positions … and in doing that, I believe it's important to pay attention to the encouraging perspectives from business leaders on the front lines.

To find out if you’re “On Track” click HERE.

To read the Liz Ann Sonders full article click HERE