Several factors have contributed to the sell-off that has seen the Dow Jones Industrial Average shed over 600 points, or nearly 5%, since reaching its 52-week high in early May. US manufacturing and employment growth has been weaker than expected lately. Emerging markets nations, such as China and India, have intentionally slowed their economies to combat rising inflation. Coupling fears of slowing global economic growth, with renewed concerns of a default on Greek sovereign debt, has compelled investors to sell higher risk stocks, and seek the safe haven of bonds once again.
US Corporations have continued to produce strong sales and earnings, but this has not been enough lately, to overcome fears of slowing economic growth. The steep yield curve is certainly not implying that we are headed for a recession at this time, but rather, a slow patch due to the aforementioned headwinds. With conservative estimates of Global economic growth still ranging in the 3-4% range, we are not expecting more than a bull market correction. As such, we will be looking to add to our positions of quality growth stocks throughout this weakness in the markets, as long as our thesis on global growth appears intact.
No comments:
Post a Comment