As many of you know, the markets have been turbulent, to say the least, followed by a sharp decline yesterday and a sharp rebound today. Though we understand such volatility is unsettling to all of us, we are seeing many indicators that this is an emotional panic driven sell off and not the beginning of a new bear market.
Probably the biggest indicator that the markets are acting irrational is yesterday's market movements where in wake of a US Debt downgrade people sold out of stocks and US treasuries rallied. The exact opposite should have happened, especially given reports of robust corporations earnings and cash surpluses.
Though there is some concern with our less than expected GDP numbers, true recession signs are nonexistent. Furthermore, while the European Union's debt problems are a big one, we must not lose sight of the fact that the growth economies of the world are becoming more significant to global GDP than Europe. We are not in the double dip recession camp and feel the S&P will end positive for the year.