TUESDAY JUNE 29, 2010

Worried about the future?

Yesterday, the market rallied on the news that the G20 was taking the necessary steps to heal the European debt crisis.  Today, the market sold off sharply, down 268 points, on concerns that the austerity measures celebrated yesterday would prove to be hurdle to future growth.  With higher taxes on the way, (the "Bush" tax cuts expire at year-end) and Corporate CEO becoming more vocal of the regulatory environment, there is reason for concern as investors look to the second half of 2010 and ask where the growth is going to come from?

I am traveling this week for client meetings and am posting this blog entry from Denver, Colorado.  The flight to Denver was full, albeit 5 hours late!  Literally, every hotel room in the City of Denver is occupied and there is construction everywhere.  The economic activity is quite impressive, consistent with the fact that the middle portion of the US is doing quite well while the coasts, particularly where the suns shines and real estate remains problematic, are struggling. 

So why the dire mood of the equity markets?  Is it possible that the markets are beginning to conclude that the policies coming out of Washington might stifle the economic recovery?  Maybe today was just window dressing.  But the stock market is showing signs of concern while the bond market, despite deficits for as long as one can see, continues to take in record cash flows.  The caution light is flashing!  

POSTED AT 1899-12-30 17:00:00.0

KEN ENTENMANN, CFA
SENIOR VICE PRESIDENT AND
THE DIRECTOR OF INVESTMENT MANAGEMENT SERVICES

Ken is a Senior Vice President and the Director of the Trust and Investment Services at Alliance Bank, N.A. He has 23 years of investment experience and oversees the management of assets totaling $1 billion. He holds a B.S. in Applied Economics and Business Management from Cornell University and an M.B.A. from the William E. Simon Graduate School of Business Administration at the University of Rochester. He has also earned his Chartered Financial Analyst designation. He is a member of the Executive Committee of the Trust Division of the New York Banker's Association. He is also a director of the Central New York Community Foundation.

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