Our global expansion appears to be slowing, which is the result of an enormous array of factors.  While the slowdown is a bit disconcerting, it is not a surprise.  Economies and markets typically “stair-step” higher and, at this point, we are on a plateau.  That said, we saw a similar scenario last summer and it will not surprise us to see the economy reinvigorate again this fall in much the same fashion as 2010.  Thus, we feel this resilient market could head higher over the next 12-18 months.

Money is always looking for perceived opportunity and value.  While the U.S. economy has certainly slowed and faces headwinds, the commerce of the United States still leads the world in perceived opportunity and value.

Consider:

In May the U.S. added only 54,000 new jobs.  It was  some 100,000 fewer than the 150,000 expected.  But we did not lose 150,000 jobs and we are not expecting to lose another 150,000 or 200,000 this month.  Even at this slow pace in January 2012, 1.5 million people who were unemployed in January 2011 will have jobs.  This means higher consumer spending and  higher demand for housing.

Housing continues to be soft.  But, with that weakness, it is by definition a much smaller percentage of GDP.  So, the drag to future GDP growth, even with persistent weak housing, will not be as much of a negative impact as it was in 2008 and 2009.

As monies continue to chase perceived opportunity, those monies will invariably flow into the markets.  Even though as redicted, the market has recently flattened out, we expect to see a higher market by the end of 2011, and thus end the year with some nice gains.