Clusters of positive monthly gains in LEI above 0.5 percent typically suggest an end to recession. Given this backdrop, I’m sticking with my projection that the recession in the US will end either late in the third quarter of 2009 or early in the fourth quarter. I suspect there’s more upside to come for stocks as the market snaps back from the worst recession since at least 1982.
A brief rundown of interesting developments in the emerging technologies space.
There are in fact signs that the worst is over. But the worst was unlike anything most of us have ever seen. Bank of Canada Governor Mark Carney, in a public speech last week, advised his audience, “Just as you don’t count your chickens before they are hatched, we shouldn’t presume that green shoots today guarantee a bumper crop tomorrow. It is a long, anxious time between the appearance of seedlings and the harvest.”
The US economy isn’t out of the woods just yet, but the pattern in LEI looks similar to those of prior recovery cycles. This, coupled with strong growth abroad, should help support more upside in stocks over the next six to 12 months.
Canada’s official data agency reported Wednesday that the pace of decline in its broad measure of economic activity slowed in May to 0.1 percent, the smallest in a series of nine consecutive declines. And the shift from a 0.9 percent drop in April is the largest month-to-month change in either direction since December 1965.
General Motors lives to fight another day thanks, but some individual bondholders were crushed by the hand that feeds it. We examine what some consider a dangerous precedent.
The power of leverage.
If this rally is to continue we’ll need to see more evidence that these green shoots are resulting in actual economic growth. After all, there’s a big difference between stabilization in the rate of economic decline and actual economic growth. This week’s retail data suggests that some of these green shoots are already flowering, but there will undoubtedly be some noise in future data. Not every economic release will be better than expected this summer.
There continue to be signs of green shoots sprouting in the economy.
There’s more to the financial sector than broken down banks.
