“For stocks, it is hardly likely to be smooth sailing from here, but conditions have certainly improved since the wild market swings that we saw over the summer.” – Bob Doll, Chief Equity Strategist for Fundamental Equities, BlackRock, blackrock.com
“We have been suggesting over the past several weeks that economic growth in the United States appears to be accelerating, and last week’s economic data helped confirm this view. Specifically, US jobless claims fell sharply and we are optimistic that payroll growth should surprise to the upside over the coming months. Additionally, consumer spending remains solid and the corporate sector has been seeing strong profit growth, a trend we expect will continue.
“While we are not calling for particularly strong levels of economic growth in the year ahead, we do believe that positive surprises may outweigh negative ones. We are expecting to see income levels rise in 2012 and are also calling for continued improvements in private payrolls creation. A key risk to this outlook remains the uncertainty over the extension of the payroll tax cut into 2012. At present, we believe it is more likely than not that a deal will be put together to extend the cuts, but absent such a deal economic and fiscal headwinds would grow.
“For stocks, it is hardly likely to be smooth sailing from here, but conditions have certainly improved since the wild market swings that we saw over the summer. Looking ahead, we can identify some reasons for further optimism, particularly in terms of how resilient the US economy has been. As has been the case for many months now, the Eurozone crisis remains the key wildcard, but we may be beginning to see a clearer endgame.”
“Government debt default concerns, rising money supply and low real interest rates have provided support to the gold price.” – Daniel Wills, senior analyst, and Nicholas Brooks, head of research and investment strategy, ETF Securities, etfsecurities.com
“Global gold ETP holdings hit a new high for the fourth consecutive week as the European Summit fails to provide a solution to Europe’s widening debt crisis.
“Although leaders agreed to channel an additional $US267bn to stabilize European bonds near term via the IMF, little progress was made towards the permanent successor to the European Financial Stability Fund. “The ECB welcomed the decision for a new ‘fiscal compact’ to set/enforce budget deficit rules, however it reiterated opposition to expanding ECB bond purchases to provide near term support to European government bond markets. Government debt default concerns, rising money supply and low real interest rates have provided support to the gold price in 2010 and 2011.”
“The U.S. economy is likely to grow between 2.5% and 3.0% in the fourth quarter of 2011 and post growth of around 2.0% in 2012.” –John Canally, economist, LPL Financial, lpl.com
“Market participants with the loudest voices and financial media were virtually convinced during the summer and fall of 2011 that the U.S. economy was in, or about to enter, a recession. Our view was, and remains, that the U.S. economy would avoid recession in 2011 and 2012, and the recent run of better-than-expected economic data in the United States has reinforced our view. We expect the U.S. economy to grow about 2% in 2012, which is below the long-term average and the consensus forecast, while emerging market countries post stronger growth and Europe experiences a mild recession.
“Our below consensus forecast for a 2.0% pace of economic growth in 2012 is supported by solid business spending and modest, but stable, consumer spending. While inflation may recede early in the year, by year-end it may begin to re-emerge as the impact of a falling dollar, rising commodity prices and the record-breaking monetary stimulus by the Federal Reserve (Fed) begin to be reflected in prices. We expect global growth in 2012 to be supported by solid emerging market growth including the consensus of 8–9% growth in China, the world’s second largest economy, while Europe experiences a mild recession. …
“Our view remains that the U.S. economy is likely to grow between 2.5% and 3.0% in the fourth quarter of 2011 and post growth of around 2.0% in 2012. A further, dramatic deterioration of the fiscal and market situation in Europe, a policy mistake here in the United States or abroad, or an exogenous event (terror attack, natural disaster, etc.), among other events, may cause us to change our view.”