Bull Market Bolstered by Factory Orders

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The U.S. manufacturing report has rebounded after a month of contraction; the latest eurozone and emerging markets reports also indicate expansion.

A “Bear Trap” is when investors are convinced that the market is poised to come crashing down when instead it relentlessly marches upward. Pity the poor bears overweight in cash – or worse short the market – betting that it will go down. Then add insult to injury with Monday's blockbuster factory orders (ISM Manufacturing) report at an astounding 60.8 reading, the second highest in 30 years, to the delight of the bulls and to the decimation of the bears. This reading was so good it corresponds to, that is, predictive of a 5.5% increase in real GDP annually. This bull market has been good to stocks, bonds, domestic, international, and Emerging Markets with all positive returns for both the third quarter and the year. That is what a pro-business environment is supposed to do, but we haven’t seen anything yet – until massive tax cuts arrive. Please see page 8 of the Global Perspectives™ Book - Global Manufacturing & Services.

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