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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives

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To: robert b furman who wrote (31299)

4/25/2012 6:05:54 PM

From: architect*

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Emerging markets have something we do not.

The USA has something the emerging market do not - consumers. Ben's estimates of forward USA GDP growth of +3% thru 2014, indicate that the USA will be consuming the stuff the emerging markets are producing, for the next three years.

Wed Apr 25 14:05:00 EDT 2012 | Briefing.com
The latest economic forecasts from the Fed were just released.

The Fed now anticipates real GDP to grow at a pace between 2.4% and 2.9%, up from the range of 2.2% to 2.7% that was issued in January. However, the forecast for 2013 now calls for real GDP growth of 2.7% to 3.1%, down from the range of 2.8% to 3.2%, while the range for growth in 2014 is expected to range from 3.1% to 3.6%, down from 3.3% to 4.0%. Longer run growth is still expected to range from 2.3% to 2.6%.

Tonight, we'll see how emerging markets and developed Asian markets respond to Ben's FONC address and estimates of +3% GDP growth. My guess is the emerging markets will be up- more tonight - than the S&P 500 was today, ie. more than 1%.

They are working hard making cheap products for us at declining profit margins.

I'm investing in the countries and companies that are producers of hard assets, but the market is currently rewarding the Apple's and Exxon's that are benefiting from consumer spending. China needs to boost chinese consumption, to become the dog, instead of the tail. Every chinese modern probably craves an I-phone.

The world meanwhile continues to build excess capacity.

That explains why the market valuations are historically low for the producers, at least for the oil and gold producers that I follow.


Oil and Gold producer valuations are historically low relative to gold and oil prices. safehaven.com[/url]

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