February 28, 2012
Schwab Market Perspective: Two Steps Forward…
by Liz Ann Sonders, Chief Investment Strategist, Charles Schwab & Co, Inc.; Brad Sorensen, Director of Market Sector Analysis, and Michelle Gibley, Senior Market Analyst.
The US market and economy appear to be moving forward, with occasional breaks. We believe this trend will continue, but internationally, questions dominate.
* US stocks and economic data appear to be moving at least two steps forward for every step back, which we believe leads to a strengthening trend for both—although there are inevitable bumps along the way.
* We believe the agreement in Washington to extend the payroll tax through 2012 may be the last substantial economic-related agreement before the election, but there are major issues looming. The Fed continues to believe another round of easing may be appropriate, which we think could be dangerous and that they should be looking to move in the other direction.
* The Greece deal is finally done-at least for now-and the market appears to be looking beyond the debt crisis. We believe European stocks are becoming more attractive, but rising oil prices pose a risk.
We continue to remind investors that nothing goes up in a straight line and the US stock market has had a few bumps in the road after a roughly 20% gain since recent lows last October. And it’s those bumps that help us to remain positive on the market trend as we continue through 2012.