By PitGuru Frank LaMantia
Reports that the middle class is declining should be an eye opener to Wall St. Those who put money into the system from buying cars, houses, or vacations are struggling. If you break it down further this means less taxes for the government as many are still losing their jobs. 61% of Americans are living pay check to pay check and 31% have no retirement accounts. The retirement age, although not raised yet, is a topic that has people concerned. People are looking to work longer because of the 2008 crash. Some lost their entire retirement savings and now have to work another 10-15 years to make ends meet. People who are desperate will work for wages much lower than those with higher standards. Those who have higher education looking for jobs have resorted to working in the service industry. The only problem is people may work for lower wages compared to those with an education. To sum this up, consumers want to pay their rent and put food on the table. Let’s call this weathering the storm and not necessarily trying to find a career. (1)
The Euro has traded at 1.2937 and the U.S. Dollar Index has traded at 82.31. (2) Should this concern Americans? The reversal of the dollar VS the Euro should be something to watch. Follow this trend closely as this could be showing money being pumped into the system in Europe. Also, this may indirectly show the U.S. may be having issues with high debt.
Earnings seem to have less of an effect on the market than it has in the past. Eyes are focused more on the economic data that is coming in and less on how companies are doing. There are companies that have low debt and high cash reserves. These could be diamonds in the rough as some of these companies remain hidden due to the overwhelming stagnation of this market.
***chart courtesy Gecko Software’s Track n’ Trade Pro
Past performance is not necessarily indicative of future results.
