Reports out of Wall Street continue to be mixed. The index of leading indicators points to economic growth, but earnings from Microsoft, 3M and American Express today show a different story. Consumers continue to struggle to find credit and companies are trying to find their own ways to extend credit to their customers to stimulate demand for their products and services.
In the housing market, home re-sales are higher due to lower prices. It looks like the supply and demand for existing homes is finally finding the equilibrium point. The Dow closed above 9,000 for the first time since January 2009, indicating that market players anticipate a recovery regardless of current earnings.
Asian markets continue to show signs of recovery and economic growth with South Korea posting its best quarter since 2003! along with semiconductors and automotive industries showing great results coming from South Korea, China, and India. European markets are up with Credit Suisse announcing profits that are 29% higher this quarter showing a strong financial institution.
What does it all mean? Is it time to put money into equities? And if so, in which markets? US markets, European markets, Asian markets or other? Which industries in these markets are more likely to benefit from a global economic recovery and why? What does it all mean for the business environment here in the United States where we are facing unemployment of over 9%?
In my opinion, US companies should concentrate on sales to governments around the globe and Asian emerging markets. They should follow government spending and industries that are likely to benefit from government spending around the world. Investors should diversify investments they pursue in emerging markets since these markets are, in the lung run, dependent on US spending on foreign goods and services. When it comes to investing in US markets; again, I would pursue industries that are likely to benefit from government spending; more specifically, infrastructure. I would not pick individual companies, but rather diversify using index funds that include several players that will likely benefit from spending in infrastructure. I still believe unemployment will remain high even if we experience a recovery in the second half of 2009 since the unemployed are likely to experience structural unemployment as new industry opportunities emerge out of this recession. Many will need retraining and relocation before they can once again become productive members in our society.
Tell me your thoughts, feel free to disagree and propose a hypothesis of your own. Feel free to use news and other research sources to formulate your answer. Have fun!
Tags: Is the recession over?
I’m not too certain where money should go because I don’t spend alot of time in the stock pages or watching the news but with my limited experience I think that investors should try to invest in U.S. companies that have gained even during the recession and even overseas companies that have gained. The U.S. needs support from it’s own people in order to create jobs and increase spending that will lead to a better eceonomy for all of us. We can hope that these good numbers will help other countries to start believing in us again and to put their monies into our economy once more.
If I had the money right now, I would start buying and flipping houses. Houses, cars, clothing, and everything else are cheaper than ever. The stock market and equities are still on the bubble and not out of trouble. The companies working with the governments needs and wants are the ones bouncing back. Unemployment will keep increasing.
I do agree the united states should look to other markets for investments…mainly i am looking at the European market. I know when McDonalds came out with their earnings in the European market, it’s value in the us market decreased significantly. Although the economy is bad and gas prices aren’t the best, oddly the airline industry is doing well. In today’s news it has come out that southwest will consider a merger with frontier. Could this be a sign that maybe the economy is on a slight upward curve? 3M also looks like it may be on an upward turn..the stock is up $1.74 according to yahoo finance and the DOW is up 1.64% with an hour and 15 minutes left in the trading day. I still believe that we should invest in foreign markets, but should still keep our market in close watch. On another note…a judge approved the Delphi lender bid to try to get them out of chapter 11…smart idea? All in all the market is up so things are looking ok for right now
I cannot contradict that United States should invest in another markets. I think its more logic to invest not as much in somebody’s market, as in market of quality. As an example, after World War II, Germany had a total crisis and huge depts., but thanks to their quality and discipline—they are an example of quality for whole world, and for a long time. I think that it’s not very much important where to invest, but what and how with the control of the quality.
I know that almost everybody here is buying a cheap thing, that’s why almost everything and everywhere is Chinese, but I think that Asian market will have even bigger crisis, if they will not change level/standard of quality.
We have a proverb:” I am not so rich to buy cheap things.” Everybody eats or buys all Chinese, because it’s cheap-I can understand that, but also everybody inhales to go to a nice Italian restaurant, isn’t it? I observe that people here buy a lot cheap things, many times the same ones?! Why do not buy not too often, maybe one, but a good one and it will serve longer?! At the end it will be even chipper.
I personally understand it from one point of view—it’s good for economy, maybe. You buy one shirt, washed it a few times, the quality says after that that you need another one, and so on…At one point I think it’s convenient to even produce a bad quality products—so we have to buy them more often. My point is—this is temporarily! I don’t want to offend anybody, but would you buy a Ford ????????????? Probably not!
More likely you will pick a German or Japanese car, because you want a good quality. A country with a good quality of products will always find where to sell it. Maybe it will take longer, but good names (of a good quality) will insurance the economy in the future.
I want to add that it seems logic for me to invest in a good education. Good education will bring qualified specialists who will found new camps of work, and they will help thousands of workers to find a job.
I think the US should invest in foreign markets because all the markets are linked, if we the foreign markets start looking up, then eventually our markets will become better. I think our banks shouldn’t give out loans as easy as they used to for people because once they start doing that we will see the Depression of 1929 all over again. I do think that banks should give out loans to college students because in the long run, the education that they receive with that money they might turn it around and figure out ways to survive this recession. i think that if people invest in infrastructure which will be sponsored by the government then yes unemployment will go down, because we can just take the majority of the unemployed people and create jobs for them by building and such.
After reading this article I was left feeling deeply compromised. As an investor the point is to make money by using the funds you have to invest in sectors that you feel are going to grow and produce profits. If you are to simply follow this line of thinking than certainly the right path is follow the trail of government spending, specifically in the areas relating to overseas investments. However as an American I feel that to focus primarily on such investments is a danger to our economy. Think for a second what would happen if the majority of our investments were to be spent on overseas projects. This would mean that instead of money being funneled back into our economy through all areas of business, we would instead be restricting access to profit-making ventures to those that still have the ability to make said investments. The problem with this is that in order to boost the economy as a whole we need to not only incerease spending, but to do it in a way that the U.S. economy as a whole will beneift. This is clearly not the case when it comes to making overseas investments. In my opinion I would like to see money being spent to give qualified homeowners the funds necessary to allow them to increase their own spending habits. By doing this we would be following the theory of trickle-down economics, albeit that the trickling down of funds will start at a much lower level than was originally designated. The second thing I would do would be to use the profits made from the overseas investments we do make to extend credit to businesses in our own country that are desperately in need of it. One of the main things I agreed with in your opinion was the fact that many of those in the workforce will need retraining in order to be capable of doing the jobs that will enable them to remain employed. Another side to this is that for those that are currently attending school in order to obtain a good job, the cost of receiving such an education is prohibitively high. I would like to see investments made that allow funds to be given to students in the form of extreme low-interest loans, which, while not producing very high profits for investors, will still grant some profit and also lower the restrictions that have kept many qualified individuals from obtaining the job training needed to become a successful and contributing member of society. It is my feeling that if we can provide people such as this with the basis for a good career, the spending that would occur upon starting such career would more than make up for the fact that the original investors are not receiving the high yield returns they would normally hope for and be good for the economy and country as a whole.
As long as the economy is struggling, people will be tight with their money and will not be making purchases unless necessary. These credit companies are going to continue to see a lack in spending until financial circumstances improve. In dealing with the housing market, everything may soon turn back to normal as previous years with the increase of the supply and demand of the housing continues to even out.
I agree in the thoughts of putting money into foreign businesses. In specific I think the Chinese businesses would be the best choice. Almost everything that we buy here in the United States has that label saying “Made in China.” I think it is safe to say that the Chinese business and economy is not struggling from the amount of factories and labor force they have to run their economy. The United States should establish markets in these other parts of the world because from what it seems as of right now, none of those countries are struggling as much as the US. If the US takes part in these foreign businesses, then there may be a way out of this downturn much sooner. The US should establish business with those markets and companies in which there is a guarantee of sales and ample opportunities for money to be made. I think that if this is done, this will benefit the US a great deal and will really help the country with the current struggles.
I also agree that the unemployment will remain high for a long while after the country gets back on its feet. Those who have been out of work may lose their skill and will need to be refreshed in what it is that they do from being out of work for such a long period of time. In addition to this time out of work, the companies will need to reorganize themselves and figure out which positions in the companies need to be refilled with employees. Overtime, I feel that these companies will definitely continue to grow and become prosperous once again.
To be blunt i am basically illiterate with anything that involves the stock market. When i see updates on the Dow and NASDAQ on the news they show me numbers on the screen next to there names. i couldn’t tell you if it was good or bad. i assume the a positive number is good and a negative number is bad, that is about all i get. But if i had to make a decision with what to do with my money if i was an investor i would invest within the United States and that’s it. Why? because the our economy is one of the most influential economy int he world and if we figure out stuff out the rest of the world will recover along with us. i know as of late when i go shopping i have been trying to buy things that are made in the US, and let me tell ya it is hard. its almost impossible to go to one store and buy clothes made in the US. almost all of out clothing comes from somewhere else. i find this to be a problem because its harder for our economy to bounce back when almost everything is being imported. here’s and idea im sure no one will like but to solve the whole unemployment problem lets start an American made clothing company! hire people who are unemployed giving them jobs and when people buy the clothes they are reinvesting in there country. just and idea.
I also totally disagree with the unemployment remaining high for long because as bad as we see things in life it doesnt mean that it will remain like that for awhile.life is like a girl/boyfriend you never know what to expect of it. i mean the way things are going everyone expects the worst of it but what i honestly believe is that things are going to get better maybe not for us but for the next generation to come.. which i believe its not that far away.honestly i totally disagree with one loosing their skills because when you have developed a skill and have been puting it to practice you become a pro at it because like i said you’ve been doing it for many years, so i dont really see why would you have to refresh your mind after spending all your years on that particular skill. And about the companies reorganizing themselves and figure out which positions in the companies need to be refilled with employees i think thats a great idea because thats how they become successful.If there is not a change theres no way you become successful.Overall, i strongly believe things will get better and companies will continue to grow.
I also agree on concentrating putting our money into foreign bisinesses because most of the most essetial things that we buy and sell each and every day. If it isnt then I bet whatever it is being sold in is. I think the majority of our concentration should involve China and other asian countries because economy is on the rise. I also agree with apippy I would love to get invloved with my friend who is into construction and do work on houses and rent them out to people. My friends dad is a plumber and he rents out houses on the side and makes bank. As for businesses like American Express I see first hand how it is struggling because I work at a pool store and thats the only credit card we dont accept.
P.S the first sentence is supposed to say…I also agree on concentrating putting our money into foreign bisinesses because most of the most essetial things that we buy and sell each and every day are made in foreign countries.
Unfortunately, I don’t know diddly about the stocks and where all the money is going. I can’t pick up the paper or turn on the tube with out catching the Dow Jones and Nasdax with colorful arrows pointing up and down with crazy numbers next to them. If I was an investor I would spend a majority of my money in the U.S because we are one of the most influencing countrys in the world. We are also relativly smart when it comes to putting the right amount of money in the right area. But then again, untill the economy gets fixed or fixes itself, investors wallets are going to stay next to their frugal fannies. Ya digg!
I believe housing prices have fallen to a point were people with good credit and a stable job can purchase a home for a reasonable price. From the article I would invest in index funds which would offer diversity and protect my investment money more.
As with past history a slight turn around in housing market always has shown that the recession is starting to improve. The cost of the government bail out is one of the factors that could have the economy falter.
First and foremost,the more better jobs are available,the better the economy and in addittion less unemployed workers out there and furthermore,i personally do think the us state should invest in foreign markets since most of the goods we use are basically from there but just as artist says and i totally agree with him is not just investing in those markets but also being able to invest in the ones with quality cause that is what we need.Unemployment will definitely remain high still even though there is a recovery in the economy but the more educated people we have out there the better the skills they have to help bring up ideas that would help build this economy.