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This Week in The Marketplace

By Staff | May 3, 2009

If we have swine flu, financial difficulties for at least one of our “big three” automakers, continued release of even higher unemployment figures, and even more again of those sluggish retail sales, home sales, and retail sales numbers, why is the overall market still continuing to move to the higher side, while so many economic numbers are looking so “average?”

As we and many other commentators have been suggesting for many months now, historically, the stock market is not telling you what it sees is going on today, but instead is telling you what it believes the market and the economy will be doing in about the next 6-8 months. In other words, the Dow, Nasdaq, and S&P 500 indexes have always been and will probably continue to be the market’s and the economy’s best leading indicators available for some time well into the future.

As we have also related historically, as well, since the early-1930s, the average good quality common stock has also registered an annual growth rate of just over 11 percent; which is double that of Treasury issues, and triple that of CDs. To receive this annual growth rate, though, you must invest in quality issues, hold them over an appropriate level of time, and have the patience not to let the emotions of the market scare you into a “buy,” when one is clearly not necessary.

Chrysler Files for Bankruptcy

After several key negotiations between Chrysler and many of its key bond issuers didn’t quite fill the negotiation bill, even after the bond interest issue had been “sweetened” by the government, Chrysler had no choice but to file for Chapter 11 bankruptcy. In announcing the filing, President Obama announced that the necessary steps have been given to one of America’s most storied automakers, Chrysler, to develop a new lease on life,” said the President. Obama also sought to dispel any notion that the filing meant that Chrysler already had one foot in the grave. “No one should be confused about what a bankruptcy process means. This is not a sign of weakness, but rather one more stop on a clearly charted path to Chrysler’s revival,” concluded the President.

Obama Decries Against Hedge Funds

“A group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-bailout. They were hoping that everybody else would make sacrifices and then they would have the money to make none and then get their money commitment-free.” Obama added that, “They were hoping that everybody else would make sacrifices. And they would have to make none.” The President concluded his remarks and views on such hedge funds and investment groups whom he characterized by saying,”I don’t stand with such people.”

Are Real Estate Values Increasing?

This is really more of a humorous observation, than one that is meant to be useful as a real estate decision-maker. “Its official: Now we can start our new multi-million dollar renovation for our casino on the Strip; and we can break ground to build that totally brand-new casino at the other end of the Strip.” See, since Vegas can now start their construction spending, the rest of their loans now in process can quickly be processed, opening the construction of the loan window, and finally opening the actual withholding of loan moneys to help stimulate our economy.” Now remember These comments are only intended for humor and happy thoughts, for a change nothing more.

Asian and European Stocks are now Healthier

Asian and European funds and stocks broke into the public markets in a quite healthy show last week, too, while presenting a healthy across-the-board set of numbers. The Bank of Japan, for example, showed that Japan’s factory action in March grew by 1.6 in March, a much larger number than had been anticipated and a sector with numbers that had also suggested much stronger numbers for each of the coming months, as well.

At the same time, Mainland China became the largest aluminum extrusion maker in the world which, alone, claimed the total with a mover of just over $1.3 billion in Hong Kong. Meanwhile, growth and expansion in Taiwan, especially in their China Mobile unit, also added substantially to Taiwan’s market cap, with the market value growth of its China Mobile unit. To make a long story short, one should consider buying Asian stocks, albeit selectively after checking with your Financial Consultant. It looks like we’re going higher from here.

Paul Rendine is the owner of the Rendine Financial Group, LLC offering securities through First Allied Securities Inc., member FINRA/SIPC. He can be reached at 410-860-1137.