Cyclical/Secular Outlook

This was presented at the Advisors Money Show by Ned Davis, President of Ned Davis Research...

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Technical stock market indicators are all bullish. Presently, demand is above supply. This is being fueled by excess liquidity injected into the economy by the Federal Reserve. Some key points:

• There are $2.8 trillion still invested in money market accounts.
• Low consumer confidence is a contrarian indicator for positive stock market.
• The Price to Earnings ratio of the S&P 500 is "12" which is a bullish indicator.
• S&P 500 earnings have increased 20%.
• Emerging Markets have had a good rum but are still expected to outperform U.S. markets.
• Emerging markets have half the debts and half the deficits of the developed countries.
• U.S. growth forecasts suggest mild and sluggish growth.
• Expect a wobbly U.S. economy for the next 4-5 years.
• Emerging Markets still have enough horsepower to run for another 4-5 years.