July 24,2009

The world-wide economy is improving.  We expect this trend to remain.  World-wide equity markets are up approximately 50% off their lows.  We look for the market gains to continue.  Financial stocks such as BAC, STI, ALL and WFC are attractive.  Second quarter profits are good.  Yes, they are coming from cost cuts and not gains in sales.  However; the earnings should be much better if/when normal sales return in a positive GNP type economy. 

Fixed income is quickly becoming fully priced.  We continue to be better sellers of paper with 5 year plus type maturities. 

We remain on inflation watch.  The massive amount of money created world-wide will eventually lead to inflation.  For the moment, we expect the new money to continue finding its way into the stock market.  This is another reason for our outlook of higher stock prices.

We see nothing in the current potential Washington D.C. legislation that is positive.  Longer term it will be quite negative for the markets if passed as currently discussed.

Previous entry: June 4, 2009

Next entry: August 28,2009