Stocks Rally: Double-Dip Recession Unlikely

Stocks Rally:  Double-Dip Recession Unlikely

Technology.jpgMost economic
analysts have lowered their prediction of a double-dip recession to 20% likely
of having one; at least for now.  With
the economy trickling toward a recovery, like a drippy facet in your kitchen sink,
it's anyone's guess whether we will sink into another recession.  Economists appear to be "holding their
breath" as they celebrate any positive economic data that points toward a
recovery.
 

Our economy is
tenuous at best after technically ending our deepest recession since the
depression, in June, 2009.  Like a
seesaw, it teeters as it attempts to find the perfect balance where
Main Street and Wall Street both can breathe a sigh of
relief.

President Obama
said today that the consumer will not lead us to an economic recovery; rather
the corporations need to lead the way to prosperity.  The consumer is still laden with debt and one
of out five homes is still "underwater" in this country.  Unemployment remains stubbornly high
averaging 10% as companies remain cautious in hiring employee's dues to
concerns over healthcare increases and employee costs.

 

The stock market
rallied today on the September ISM non-manufacturing index figures showing a
climb from 51.5 to 53.2, which surprised analysts.  The market liked the news and sent the stocks
soaring into triple digits, adding to an already robust rally.  This gave the hedge funds a 4-5% boost for
the year. The news that
Japan cut borrowing rates to stimulate their
economy also added to the rally.

Clearly, the news
for today made fund managers jump out of their chairs with joy after a
difficult year of trading in the equity markets.  Finally, they are able to show some positive
gain for their investors.  The question
is will the rally last after the unemployment job claims number is released on
Friday?

I anticipate that
this number will remain flat with no real significant change.  The reality is that 8 million people are
still unemployed, and struggling to find a job, making this recent stock market
rally insufficient for real growth in our economy in the short term.  The federal debt continues to increase as
congress debates whether they should raise taxes for the people who actually
have jobs.  I am not celebrating yet!

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