‘Era of Uncertainty’ May Be Drawing to a Close

We are scheduled to interview on Bloomberg TV at 9:15 AM, Monday, December 24 with anchor Betty Liu on “In the Loop.” Our discussion will likely include markets and factors like the fiscal cliff and debt limit debates. “The market has been flat since the election,” said one pundit in a recent interview.  “Really?” I thought.  Not by our data.

John Browne submits:Last week, the Dow closed at 10,741, up some 64 percent since its 2009 lows, [03/19/10, Yahoo! Finance] when most markets had priced in the likelihood of financial Armageddon. As the markets have rebounded from the brink of disaster, many Wall Street cheerleaders have proclaimed the dawning of a major new bull market. If we measure market cycles biannually, and if bull markets need not eclipse peaks achieved in previous cycles, then this forecast is spot on.

WASHINGTON — The U.S. economy grew faster than previously estimated in the third quarter as exports and government spending provided a lift, but that boost is likely to be lost amid slowing global demand and a move towards tighter fiscal policy. Gross domestic product expanded at a 3.1% annual rate, the Commerce Department said in its third estimate on Thursday, up from the 2.7% pace reported last month. It was the fastest growth since late 2011 and also reflected a slightly better pace of consumer spending than previously estimated.

Low capital expenditures, decelerating corporate growth and a global economy that's improving at a snails pace are the metrics that are most responsible for anemic growth in the U.S.. This is according to a recent report by Fidelity's Dirk Hofschire and Lisa Emsbo-Mattingly. On the upside—the housing market, manufacturing, credit, and improving labor fundamentals. Here is Fidelity's scorecard of U.S. economic indicators:

Think back to December 1982 and imagine a business leader with 25 years of experience. That executive had managed through five recessions. Now fast forward to December 2007 and visualize the next generation business leader. In that person's 25 years of experience, he or she had managed through only two recessions--and those were two of the mildest recessions on record.

As easily predicted, at least in this corner, the Markit Flash Eurozone PMI® shows Downturn in Eurozone economy extends into seventh month. Key Points