Investor Brief: Happy Memorial Day
May 30, 2011
I hope you're enjoying the Memorial Day (วันรำลึก) Weekend and the unofficial start of summer. Gas prices have actually come down (มาลง) a bit, so if you’re traveling, it should cost you at least a little bit less.
I decided to take advantage of the long weekend and get in some vacation time this week. I know you’re busy with your weekend plans as well, so we’ll keep this week’s Investor Brief short.
One of the big stories in the market remains debt — in both the U.S. and Europe. We were talking about the European debt crisis a year ago at this time as well. At that time, however, the crisis was in its earlier stages and fears were greater that it could impact economies all over the world. Those fears (กลัว) aren’t as strong as they were during last summer’s sharp sell-off, but the story rose back to the front pages and rocked the market again last Monday and Tuesday.
In the U.S., debate is intensifying over what to do about the growing debt problem here – $14 trillion and counting. Broadly speaking, there are two plans being discussed in the corridors of power. The plan from Gene Sperling, the Director of President Barack Obama's National Economic Council, calls for tax increases to bring in additional revenue while also cutting spending. The one from Congressional Republicans, led so far by Rep. Paul Ryan (R - Wis.), relies on spending cuts to relieve the debt burden.
This will be one of the most important stories for investors (นักลงทุน) and the stock market over the summer. The markets want to believe that the government can and will get a handle on its fiscal situation. If investors do not believe sufficient progress is being made, the pros I talk to believe we could see a market disruption stocks could fall, interest rates rise and the bond market (ตลาดตราสารหนี้) sell off. The longer the government takes to come to a decision, the less confidence the markets will have and the higher the likelihood investors will stay cautious.
I will continue to follow closely the debt situation in both Europe and the U.S. and let you know what I’m hearing from the pros on Wall Street. We’ll also talk more in the coming weeks about the stories likely to have an impact on the market in the second half of 2011.
Enjoy the rest of your weekend, and please take a moment to remember the purpose of the holiday: honoring the men and women who have died while serving in the U.S. military.
Thanks for Maria