Recovery

Recovery is at hand as evidenced by the rising trend in US GDP and the 12MMA data trend ascent that began in January 2010.  New Orders are in a recovery trend and people are spending money.  The recovery is sustainable through at least 2010 and we think well beyond this year.

You may have heard this prognostication from us at any number of presentations.  So why repeat it now?  Because it is important to keep that construct in mind as we go through the next two quarters and are talking about some weakness in the leading indicators.  From the S&P 500 Index and rates-of-change to the Purchasing Managers Index rates-of-change to the Corporate Bond Prices trend, there is going to be less-than-stellar news ahead.  However, it is not expected to mean that the end of the recovery is nigh upon us.

The subtle weaknesses in the leading indicators cited above (and others) are an indication that the recovery’s 2010 rate of rise will dissipate in 2011.  A diminishing rate of rise means growth but at a slower pace for the year.

Our extended outlook is for 2012 to come in stronger than 2011. 

So think ongoing recovery.  Plan for ongoing recovery.  Take risks knowing that better days are ahead.