Like it or not, we now face about 20 weeks of investor anxiety where week-by-week and even day-by-day, there will be a market test of US and Chinese economic data. As well, there will be a general watch on anything out of the European Union (EU) that could disturb debt repayments, yields on sovereign bonds, the stability of the banking system and the course of Europe’s expected recession.
Sure, US company news will also be watched closely and every word Ben Bernanke utters will be analysed, dissected and assessed to ascertain if QE3 (quantitative easing, package three) – that is, more monetary stimulation – is in the pipeline for the Yanks.
I genuinely hope QE3 won’t be needed as it will show that the US recovery has solidified. Right now, economic data is softening in the US, but this is not a reason to be too negative because there are some good signs for the future of the economy as well as Wall Street.