Pre-Outlook for 2012…….update afer report
On the eve of the widely anticipated good employment numbers and before we complete a full 2012 Outlook a few things jump out to me as to big factors in 2012.
1) U.S. Economy will continue a modest recovery.
2) Interest rates will start a modest rise and the FED will try to keep a lid on that rise.
4) The dollar will be strong and continue higher.
5) Gold has little reason to perform in a rising interest rate, rising dollar environment.
6) Commodities, the Ag’s, copper, etc, have generally made macro double tops, 2008 and 2011, and while bounces from low levels in fourth quarter 2011 are probable, the main influence is more downward pressure.
7) Rising interest rates will in general keep stock and commodity markets from exploding on the upside. At the moment the charts point to a belief on the part of investors that the large – cap multinationals will benefit from emerging market strength. That is ironic as rising interest rates will affect Europe and emerging markets the most. At the same time the NASDAQ 100, the techy area, is looking tired and if there is a problem with 2012 markets, it will show up here first in my opinion. All that said, the fourth quarter 2009 market levels should contain any misfires during this election year.
8) The election will be wide open. A weak Republican slate could win if it can harness the anger of the middle class. To me there is no doubt that the under 35 population is more conservative than their parents. They have watched the end and rollover of the 72 year economic cycle over the past 15 years and are looking for answers for their lives. The over 65 population is just trying to hold on. And lastly the 35 to 65 year population is in turmoil as they try to reset their lives.
All in all, the candidate that is bold enough to entertain bold ideas that make sense will win the election. And from that standpoint I still have an inkling that Gingrich is the only Republican who can throw out original ideas. Romney is old school boring, Santorum is old school religion, and Perry is old school tough guy.
Obama’s crowd still doesn’t get it, Harvard ideas will not play in this election. To Obama’s benefit is the fact that little things are happening everywhere, alternative energy production is increasing and austerity measures are reducing government employment costs.
This will be the election of the century to watch.
UPDATE at 7:30 AM:
The employment number was + 200,000, a good number.