The bull market in the coming week is two years old. The January and February brought good index gains. Since 1950, there was not a bad trading year on Wall Street, where the first two months closed with gains. Previously, this was 23 times the case. The average increase was a rise of 20%. My prediction at the beginning of a rise of around 15% was thus very conservative. Also for the March, I expected the index further increases. The brief respite it offered buying opportunities that have been discussed on the hotline.
The U.S. dollar is now interesting again after the euro well above its purchasing power parity increase of $ 1.25.
A burden is, however, the high oil price dar. The unrest in the Middle East will not agree to any quick relief. Precious metals will benefit from this uncertainty. In both sectors, I stay still (a little frustrated) viewers.
The American labor market is improving. In February, 192 000 new jobs were created. In the private sector, there were actually 222,000 in the civil service since it came to layoffs. At the same time, the employment figures for December and January after by 58,000 revised upwards. The unemployment rate fell for the first time since May 2009 again under the 9% mark. The two-year weakness in the labor market (red shading) is overcome, despite the improvements since March 2010 (green shading) previously defined (yellow shading) was. In the coming months is likely to emerge here, a more continuous development. The monetary policy of the U.S. central bank pays out on the labor market.
past two years (green shading), productivity (Prod) in the United States has improved significantly. Unit labor cost (ULC) are of their depression End of 2009 (red arrow), as they were as pleased at the beginning of 2002 (red arrow) down 3%, now back on the zero level (blue arrow) increased. Both statistics support the positive earnings trend since mid-2009 with U.S. companies, which is on a new record high. An immediate inflation pressure is not currently visible. However, will limit price increases in commodities further profit improvements, if companies can not impose price increases. In plain language this means that in the next few quarters, inflationary pressures increase or decrease the profit increases.
More Assessments and recommendations on the hotline. The next blog will appear on Monday, 14 March.
Heiko Thieme
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