From Cynthia Scott of OMC Financial Services:
The famous saying is that “the stock market climbs a wall of worry.” What worries it now is:
**The unemployment rate still is 8.3%; however the real number is probably about 15 or 16%
**Europe is still in financial crisis
**Health care costs are expected to increase since Obama Care requires companies to pay more for their employees
**Housing is rebounding slightly, but still is in trouble because of foreclosures and banks reluctant to lend
What encourages the stock market is:
**Corporate earnings have been better than expected although revenues have been lower than expected
**China’s economic slowdown does not seem to be as bad as first anticipated
**The number of new jobless claims each week has slowed down
**Interest rates are so low that income investors are seeking dividend income
**Corporations’ balance sheets, even some banks, are very good and they have a great deal of cash
**The reason the rallies are so strong is that they are event driven not based upon fundamentals at this point
