Investor confidence in the US and across the globe remains in limbo. The market is waiting for an indisputable sign that growth and rates of return are nearing a turning point; but so far, the weight of recession and lingering financial troubles hasn’t let up.
The Economy And The Credit Market
Investor confidence in the US and across the globe remains in limbo. The market is waiting for an indisputable sign that growth and rates of return are nearing a turning point; but so far, the weight of recession and lingering financial troubles hasn’t let up. However, in the meantime, fear that further financial seizures are just around the corner (a high probability risk just six months ago) has encouraged capital to find its way back into the capital markets from risk-free assets like Treasuries and money market accounts. Looking ahead, there are a few major events that could alter the market’s perception of risk: more optimistic economic forecasts from policy makers and the outcome of the first quarter earnings season. Today, the Fed released its Beige Book with the usual grim assessments. But, this time around there were a few bright spots hinting to the inevitable recovery. Whereas, a return to growth may be a long ways off, the appraisal of business health is active and ongoing. Particular interest will be paid to the revenues of the large US banks - who have so far bested expectations and raised the outlook for the Fed’s ‘stress tests.’
