Friday, October 2, 2009
I think the latest setback in the market is just one more case of jitters. The VIX has picked up, and credit spreads have widened a bit. The market worries that something might go wrong after such a huge rally. Is the market overextended? Are markets too optimistic? Will the economy hit another downturn? All of these concerns fall into the category of "climbing walls of worry," which is what happens after such a devastating market as we had earlier this year and things begin to recover.
I don't seen any deterioration in the fundamentals of the economy. Money is abundant. Commodity prices are still trending higher. Credit spreads are trending lower. Global trade is rebounding. Confidence is returning. Job losses are slowing.
I think we'll see the equity market continue to move higher, in fits and starts, for some time to come.
Posted by Scott Grannis at 8:14 AM