Friday the first quarter GDP numbers were released and they showed the overall economy had declined in the first quarter. The goods and services generated by the economy in the first quarter were less than 80% of what was produced in the final quarter of 2011.
The loss was attributed to sharp cutbacks in government spending combined with less investing by buy big business. Many economist expected that the GDP would come in higher because of the unseasonably mild winter had lower consumers cost for fuel.
All of the news wasn’t bad as consumer spending which has driven the economy for the past several decades remained robust. Although the numbers weren’t great they were better than April of 2011 when it appeared that the much feared double recession could be in the making.
The bond market continued its assault on lower rates as the six week rally has seen interest rates fall back to near record levels.
How long can the bond and stock market continue to rise together? For most of the past sixty years they have moved in opposite directions. When the yield on government bonds rises (prices go down) much of that money comes off of the table and goes into the stock market.
Most experts agree that the current situation can’t last forever, but as long as Mr. Bernanke holds all of the cards, who can be around to argue with him?
At some point the market will create opportunities for us and when it does we must be ready to react to what the market is telling us to do.
Reacting to markets is crucial and that is what I can teach you to do. All market phases present opportunities and this market will be no different.
To learn firsthand how I would teach you how to take advantage of any market condition, speak to one of my financial consultants and sign up to work one-on-one with me here:
Keep those stops tight.
Todd “Bubba” Horwitz
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