The coming equity surge
In 2014 to date, we have seen a more or less stable, a nice word for flat, equity market. That's a broad brush look at the indexed markets, a valid indicator for sure. Beneath the surface it's a different story as there have been opportunities in various stocks, especially small caps, and industries, notably technology, that seem to be relatively obvious and have offered almost immediate capital appreciation. This is a situation related directly to the current equity market and not a long term prescription for investing, but it has been working in 2014.
This mixed but overall "stable" market has been in the face of rationalizing the 2013 gains and dealing with U.S. weather conditions that have been more important than many pundits want to realize. The ubiquity of the harsh weather has had widespread impacts on consumer spending, on new home starts(duh), and on new hires, but that has all been relatively gracefully absorbed by the forward looking market. Here that is viewed as a signal.
Barring unpredictable negative events, the underlying strength of the U.S. equity market will begin to show up as we dig out, in the South, the Northeast, and the Midwest, which pretty much covers most of America except the dried up California(not unimportant in having an impact). The opportunities that are seen in the merger and acquisition market could begin to start a gold rush of sorts, as so much cash has been stored away at healthy corporates. Should Congress and the Administration get embarrassed into actually starting to take some action on either immigration or infrastructure spending it would be additive in a major way, but that is unlikely as long as Harry Reid is around, one of the most dismal characters in Washington, one who inspires more animosity than cooperation even with many in his own party.
While the equity market is, as mentioned, forward looking and it may have already discounted a reasonable amount of what is commented on here, unfolding current events can always disrupt what has been expected. From this perspective some positive disruption seems entirely possible as the year progresses.
This mixed but overall "stable" market has been in the face of rationalizing the 2013 gains and dealing with U.S. weather conditions that have been more important than many pundits want to realize. The ubiquity of the harsh weather has had widespread impacts on consumer spending, on new home starts(duh), and on new hires, but that has all been relatively gracefully absorbed by the forward looking market. Here that is viewed as a signal.
Barring unpredictable negative events, the underlying strength of the U.S. equity market will begin to show up as we dig out, in the South, the Northeast, and the Midwest, which pretty much covers most of America except the dried up California(not unimportant in having an impact). The opportunities that are seen in the merger and acquisition market could begin to start a gold rush of sorts, as so much cash has been stored away at healthy corporates. Should Congress and the Administration get embarrassed into actually starting to take some action on either immigration or infrastructure spending it would be additive in a major way, but that is unlikely as long as Harry Reid is around, one of the most dismal characters in Washington, one who inspires more animosity than cooperation even with many in his own party.
While the equity market is, as mentioned, forward looking and it may have already discounted a reasonable amount of what is commented on here, unfolding current events can always disrupt what has been expected. From this perspective some positive disruption seems entirely possible as the year progresses.
posted by John Borden at 2:14 PM
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