Lack of end demand is seen in recent retail sales data and that is telling us we aren't likely to get much follow through from the quarter 4 inventory rebuild cycle.
IN an environment of steep SPX valuations, and narry a bear ot be found, the ebulence of bullish sentiment is usually waiting for an adjustment.
As the GOV steps in to backstop almost everything, provide majority of mortgages, and spender of last resort, any pullback of Government stimulus will be felt immediately.
There is constraint in the credit system and the secondary market barely exists. You could say our economy is on life support.
With commercial and residential construction so overdone, the stimulus money earmarked for construction projects may get detoured to help PLUG holes on local governments fiscal shortfalls.
If housing prices continue to decline the already huge number of home owners falling behind on mortgages will surely explode higher. Foreclosure filings continue to rise, where is the data to suggest a silver lining.
If it were not for that accounting rule change, would the big banks appear sound?
If you are buy and holding I assume you are hoping that the fundamentals that don't back up the V shaped recovery thesis finally do.
I have read other reports where SPX fair value maybe closer to 800-900, FWIW.
The economy barely has a pulse, and DEMAND for bank CREDIT is VERY weak, even as banks employ stricter standards.....credit card credit has been reduced and credit lines cut.
My friends, I fail to see the back drop to blue skies. With a S & P dividend yield near 1.88%, 6% is where previous SECULAR BEARS ended.
Duratek
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