THURSDAY JULY 29, 2010

Still tough sledding ahead.

The markets have staged an nice rally in July, fueled by a smashingly successful 2nd quarter earnings season.  The double dip fears have diminished and the end of the world contagion scenarios have all but disappeared.  But it is probably too early to sound the all clear signal.


The question for investors is how the market will react after the daily dose of good earnings reports goes away, which will be sometime in the next week or two.  Then the market's focus will return to the economic numbers.  And, the numbers have been a little soft of late, persistently so in the employment area.  Also weighing on the economy will be the fading of the myriad stimulus programs that hit the economy in the last year.  Cash for Clunkers... refrigerators...used golf clubs, the first time home buyer tax credit, etc.  Given the heated political environment and the soon to begin election season, it is unlikely that any large. additional stimulus will make it out of Washington.  On the other hand, interest rates are incredibly low and will help.


So, the question becomes one of sustainability, even at the modest growth levels of today.  Investors should anticipate volatility as the market swings on the latest economic statistics.     

POSTED AT 1899-12-30 08:32:00.0

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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The opinions expressed here do not represent the views of Alliance Financial Corporation and Alliance Bank, N.A. This communication is not an offer or solicitation for the purchase or sale of any security, is for general informational purposes only and does not provide personalized investment advice. When making personal investment decisions you should consult your investment adviser or rely on your own research. Copyright 2008.