Welcome back. Hope you had a great 4th. We sure did! Now, back to business… If the majority of Wall Street economists are right, the U.S. recession will end this quarter and the global recovery won't be far behind. And our window of opportunity for once in a lifetime deals is here, but not for long. (Read on below.)
On Wednesday, the International Monetary Fund is expected to nudge up its forecast for 2010 global growth from the current estimate of 1.9 percent, primarily because fears of a more serious economic setback have not materialized. That makes for a brighter backdrop to this week's meeting of leaders from the Group of Eight major industrial nations in Italy, where the economic outlook is top of the agenda.
As you have noticed lately in the skittishness of the stock market, recovery will not be a smooth process. As Banc of America Securities-Merrill Lynch economist Drew Matus put it, this quarter marks a "new beginning with some nagging reminders of the past."
First, the good news.
1. The U.S. housing slump appears to be near an end after 3-1/2 years of decline. That, combined with a strong stock market performance in the second quarter, should stop the bleeding in household wealth. (Read more about housing bottom news here.)
2. Government stimulus money is flowing in the United States and other major economies including Japan, China and Germany.
3. Global manufacturing surveys show output expanding after a year-long period of contraction. In the United States, the pace of new orders is improving while inventories keep shrinking, so production may need to pick up soon to meet demand.
4. Figures due on Thursday are expected to provide a good illustration of that. Economists polled by Reuters think U.S. wholesale inventories dropped 1.1 percent in May, while sales were flat.
Those are among the reasons why Matus recently raised his U.S. economic outlook to show an above-consensus 2.7 percent jump in 2009 gross domestic product.
Now for the bad news.
1. Wednesday's report on U.S. consumer credit bears close watching for more evidence that Americans are paring their credit card debt as banks clamp down on lending and consumers rethink attitudes toward borrowing and spending.
2. Job losses are likely to keep piling up at least through the end of the year. Last week's disappointingly weak June employment report served as a reminder of that. The data showed employers cut a net 467,000 positions last month, far more than expected and considerably more than in May. The White House expects unemployment to climb to 10 percent in the next two to three months, far higher than it envisioned back in January when it was pushing for its $787 billion economic stimulus package.
"The heavy loss of jobs in June is a warning that the road to recovery will be bumpy, but doesn't yet indicate that we have gone off the track," said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts.
If there is a bright side to stubbornly high unemployment, it would be that it helps keep inflation at bay even after the recovery gets going. That takes some of the heat off the U.S. Federal Reserve and its central bank counterparts in Europe and Japan to raise interest rates once the recovery begins. Those low rates and even lower home prices are making affordability at levels not seen since the 1970s.
It's absolutely time for you to buy below todays already low prices, from very motivated sellers, and then quickly sell and put profits in your bank today. This window of opportunity is here now, but it is hard to say for how long. The best way to find those deals, and buy them right, is by following my 7 step instructions as outlined here. Then attend my next Mastering Mini Lab Webinar on July 14th to learn "How to Find the Money for Your Deals" at 6pm PDT (9pm EST). Call our Senior Consultants Jim or Andy for the details… 800-310-7730 x2
|
|
|
|
|
 |
