On July 17th, in our Summer Market and Economic Commentary, we cautioned that the unusually calm conditions in the equity markets were likely near an end. After yesterday’s nearly 500 point intra-day drop in the Dow, clearly that predicted phase is amongst us.
In my 25 year career, 7-10% corrections during healthy bull markets are the norm, and frequently are followed by further advances. As our regular readers know, along with our recent prediction of volatility, we still maintained that we were well entrenched in a long-term, secular bull market. After a day like yesterday, you may be asking, “What is North Pier thinking now?” The answer is…our themes aregenerally still intact. Though international economies are showing some initial signs of cooling, the US is still on very solid ground. Our key coveted indicators, the ISM Reports On Business, are still suggesting robust growth. However, with topics like ebola and ISIS in the news, emotions are high.
Stay tuned for our upcoming commentary. We’ll review the recent cooling factors and even more compelling evidence supporting our theme of predicted global expansion.
Until then, as we said in July, we have a firm hand on the helm and are watching our gauges…”Steady as She Goes.”
All the Best,
Jim