Is A 25% Gain On The S&P 500 In 2012 Reasonable? [Podcast]
By Gary Gordon:
Investors are piling into stocks again. However, with 22.5% gains for the S&P 500 since the October lows, one may want to take a deep breath.
Consider the fact that the Bureau of Labor Statistics (B.L.S.) lowered the national unemployment rate to 8.3%. If you believe the B.S. (I mean, B.L.S.) report, corporations may be back in the hiring game. Yet the largest seasonal adjustments in employment data come in January, making the month a very poor predictor of future employment patterns.
And that’s not all.
In November, Americans were saving at a 3.5% rate. By December 2011, that number jumped to 4.0%. It follows that an improving labor market by itself may not translate into higher levels of economic activity. What’s more, even with record low mortgage rates, home prices are still pushing lower. If we don’t get a corresponding pop in real estate, we aren’t likely to benefitComplete Story »