David Stockman’s new book “The Great Deformation” is a brilliant, penetrating analysis of the present state of the US economy and the US political system, and a detailed account of how the nation got into this mess.
It is a common trope in science fiction novels. Economic transactions are handled seamlessly with a wave of a card or a physically imbedded chip, and whatever the author imagines money to be is transferred, far removed from the archaic confines of ancient physical monies.
The University of Michigan Consumer Sentiment final number for April came in at 76.4, a welcome improvement over the preliminary reading of 72.3, but below the March final of 78.6.
For the past few months, there have been some catalysts that have depressed commodity prices. The number one reason has been the rally in the dollar caused by Italian elections, Cyprus’ banking issues, strong U.S. economics, and anticipation of Japanese easing monetary policy.
Earlier in the month I suggested that we would likely hit a soft patch in Q2 and projected that the markets would remain weak through most of May. However, given the risk of recession remains a remote possibility, any pullback in the markets would serve as a buying opportunity. I believe the U.S. economy is still on a growth trajectory and if an economically weak Europe can re-energize in the second half, then the markets should head higher with cyclical sectors leading the charge.
Here’s what’s going on with the markets, in my honest opinion. It’s a bull market in stocks, according to both the Dow Theory and the PTI, and has been since mid-2009.