This report was prepared by my firm LPL Financial.
It seems that Mother Nature has a cruel sense of humor. She always seems to throw a string of beautiful spring days out of nowhere at the end of a long winter just to get us tempted to think that the frost and cold are all long gone. Warm weather may be just around the corner, but don’t pack up the mittens just yet – Mother Nature usually has a few more cold days up her sleeve.
Similar to the weather, the market is showing signs of warming up: good news is getting more frequent and some of the bad news is less awful, which is creating a backdrop that sets the stage for recovery. With the conditions turning more positive, highlighted by the double-digit rally in stocks over the last week, could we have seen the worst? Can we finally put the snow shovels away and look forward to the green sprouts of new growth?
More Challenges To Come
While we might have seen the worst, the market still has challenges to overcome. One reason is that the major market and economic indicators that are the signals of improvement have not all aligned to signal a recovery. In fact, prior to last week, the stock market had continued to make new lows while other key components of the investment environment had shown improvement. For example, the debt market – where the recession began – began to stabilize. Also, leading economic data and measures of economically sensitive commodity prices have reflected some recent improvement. However, for most of the year, stocks did not follow suit. […]
