In all of our assessments regarding the future of our economy, there is always a warning attached which goes something like this -- unless the European debt crisis explodes. We had some good news regarding the economy in the past several weeks, especially with regard to the all-important employment sector. Last week there were not as many economic releases to focus upon. This enabled the markets to refocus upon events in Europe and it is reassuring that, at least for the moment, the crisis does not seem to be boiling over. The news from Europe seems to be positive one day and negative the next. What we need is our economic recovery to be as strong as possible right now to help lift Europe out of its malaise but also withstand weakness coming from Europe.
Corporate earnings reports also started flowing this week. Many have made a big deal about the fact that corporate earnings experienced double digit growth in the past few years but this did not result in the significant hiring of new workers. Well, now workers are being hired and the pace of earnings growth is expected to slow this year. What we can't have is corporate earnings slowing too much so that the momentum of a stronger labor market is halted. Expect there to be a significant focus on results reported during each earnings season this year. Meanwhile, though oil prices closed the week lower, the stronger economic news has coincided with a general rise in the price of oil. Much of this movement has been disguised because seasonal factors have kept gasoline prices low. Eventually gas prices will start rising if oil continues to settle northward of $100 per barrel. This would be one of the costs of a "better news" economy.
Source: Origination Pro
Corporate earnings reports also started flowing this week. Many have made a big deal about the fact that corporate earnings experienced double digit growth in the past few years but this did not result in the significant hiring of new workers. Well, now workers are being hired and the pace of earnings growth is expected to slow this year. What we can't have is corporate earnings slowing too much so that the momentum of a stronger labor market is halted. Expect there to be a significant focus on results reported during each earnings season this year. Meanwhile, though oil prices closed the week lower, the stronger economic news has coincided with a general rise in the price of oil. Much of this movement has been disguised because seasonal factors have kept gasoline prices low. Eventually gas prices will start rising if oil continues to settle northward of $100 per barrel. This would be one of the costs of a "better news" economy.
Source: Origination Pro
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