Is The Market Showing Signs Of Improvement?

It’s too early to tell, and I don’t want to jump the gun the way that the media jumped the gun about saying we’re in a recession. They love to play off of our fears, and they rarely have anything POSITIVE to report. Here are a few things that are going on which show traces of improvement in the economy and the private sector itself.

  • The oil price is declining. It’s down to $119 a barrel after it hit an all-time high of $150 a barrel. I wrote a post a few weeks ago that $4.00 a gallon for gasoline was the tipping point. It was the point where Americans started cutting back on consumption, and market forces took effect. You’re now seeing those market forces bring down the price of oil back down.
  • Established companies are showing steady profits. Cisco, the IT giant posted nice profits for the 2nd quarter, and other fortune 500’s are expected to follow.
  • The dollar is starting to strengthen again.
  • The price of commodities and precious metals is declining. Commodities and precious metals have an inverse relationship to the health of the economy and the stock market. When it’s doing bad, gold goes up, when it’s showing signs of growth, gold prices go down.

So, buck up champ! The economy isn’t as bad as you think it is! Stop dwelling about how hard it is to pay for gas and food, and start spending your time thinking about ways to increase your income, save money in your budget, and save for the future.

  • ekrabs

    Well, the bottom line for me is that nobody really knows. The news at best, can only report what they see, but while we all want to know, it’s anybody guess.

    That said, it’s worth noting that part of crude oil’s slip is due to Bernanke holding on current interest rates, causing a slight strengthening of the Dollar. So, I don’t think the cost of oil has fundamentally changed much recently.

    Yeah, tech is making a bit of a come back. I’m really not sure why. Would love to hear if anyone has a theory on that. But then, it’s been battered for years since the dot com burst, and has yet to really recover.

    But yeah, things seem to be lifting somewhat. I’m still bearish in my views, but it shouldn’t cause the average investor any loss of sleep. The market is still quite vibrant and is by no means getting beaten quite the way it has been in the past and yet still have managed to bounce back somehow.