As we know the stock market is tumbling down. There is a very messy combination of events occurring that are pushing equities downward - the eurozone crisis and the further softening of the US economy as evidenced by the trickle of new jobs added in May. The eurozone crisis is having a negative impact on the global economy. Critics of Obama will no doubt leave off the part about how the eurozone is in severe crisis and that is messing with the US economy. That is something that Obama or Romney cannot control.
As this continues look to the Fed to possibly enact more quantitative easing in order to prop up equities, the keyword is possibly. One suspects that the Fed is weighing that option and one can speculate on the criteria they consider. The big one would be - how deep and how far could this bear run go. We are not quite at the crash line but the ears are perked and the attention is intense.
On the other hand, as always many investors see this as a buying opportunity and that should tell you that it's still about the long term.
Reuters: Wall Street Week Ahead: Time for some more stimulus?
Stock market rallies in each of the past three years were fueled by combinations of massive central bank and government stimulus spending. That maybe the only hope for equities this year, too.
Bear markets are raging in Spain, Italy, Brazil and Russia. Asian stocks have been weak. Most of Europe's other markets are negative for the year, and that is where U.S. stocks are going - and fast.
"Companies that we liked before are becoming more attractive from a valuation perspective and we have been buying more of those..."
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