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The Stock Market Is Entering A Slow Summer Season

The Stock Market Is Entering A Slow Summer Season

Not so long ago, S&P warned the US government of consequences if a massive federal deficit is not fixed; as it was estimated, there is a 33% chance it would lower existing triple-A rating. The US trade deficit worsened. More automobiles and other goods were sold abroad but oil imports increased. So that high oil prices is one of the reasons that the trade deficit rose 6% in March from February. The unemployment monthly rate slightly grew, from 8.8% to 9%. The productivity growth slowed in the 1st quarter.

However, long-term fundamentals look strong. During the last several quarters in a row, the US biggest corporations had stronger revenues and better profits. The recent slight correction in commodities prices will help the economy growth. The current market weakness can be partly explained by typical for this time of year assets re-location – many big investors are making summer seasonal adjustments to their portfolios. They are switching to cash and bonds trying to anticipate a statistically known summer market slowdown.

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May 25, 2011 Posted by | Stock Market Forecast | , , , , , , | Leave a comment