Via Liz Ann Sonders at Charles Schwab:
- Taxes are not going higher, while the bill also includes a payroll tax reduction and immediate and full expensing for business investment.
- Leading indicators have reaccelerated and manufacturing is expanding at a seven-month-high pace.
- Initial unemployment claims have significantly broken out to the downside.
- Credit conditions are improving markedly for both consumer and commercial loans.
- Real consumer spending is back in expansion mode, having surpassed its 2007 high (ahead of GDP doing the same).
- Earnings growth remains high and steady, keeping valuations reasonable.
- Core inflation remains contained.
- Merger-and-acquisition activity is picking up sharply, especially among technology and energy companies. You can read more about sectors from Brad Sorensen.
- Long-term yields are up, but short-term rates are low and steady; lending support to the economically important steep yield curve.
- QE2 is having success boosting asset prices and should offset some of the recent drag on the savings rate while boosting household net worth and confidence.
- The election cycle greatly favors the pre-election year (2011), with an average annual gain of over 17% for the S&P 500® index and no down years since 1945.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.
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