Wall Street Steward Blog


2012 Outlook: Meeting in the Middle

Recently we have experienced a market of extremes. In 2012, finding a middle ground, or Meeting in the Middle, is going to be key for growth in the markets and economy. Consumer sentiment, business leaders, policymakers and geopolitics are going to have significant impact on the investment environment. We believe that:


A More Durable Rally

The stock market, as measured by the S&P 500 Index, has returned to the high-end of the trading range of the past two months, as you can see in Chart 1. This is the fourth time the Index has rebounded to around the 1220 level. Each of the prior three rebounds were reversed as the market was pulled lower again by fears of financial crisis and recession. Rather than retreat back to the low end of the trading range over the next week or two, there are several reasons why this rally may be more durable than those that preceded it in recent months and may sustain much of the of the gains, as the S&P 500 Index takes a volatile path back toward a modest, single-digit gain for the year.


Eurobonds: A Potential Positive Not Lost in Translation

Last week,  Federal  Reserve chairman, Ben Bernanke delivered his speech from the Fed’s Jackson Hole conference, the event that helped to turn around last summer’s fear of recession. While people along the eastern seaboard lined up at stores on Friday, August 26, to buy batteries and bottled water in anticipation of the unknown ravages of hurricane Irene, gentle Ben provided no surprises to disturb the markets. Instead he provided a review of the Fed’s economic outlook and policy options already well known to market participants. The attention on the Fed was misplaced. While market participants have been demanding a response by policy makers, they are looking for that response in Europe more  than in the United States.