Stocks continue to trade in narrow range with the election dominating the headlines. We still are seeing modest growth and positive earnings guidance, but the main focus tends to be on the 2012 Presidential Election.
Although we are seeing a sharp short term decline in oil and improving labor/ jobs numbers, the market seems to want to stay in this sideway trading pattern. We don’t expect a huge swing either way once the election results are determined, but it will have a longer impact of how long the rally stays around. As we have stated in the past, rates are a big concern as we move into 2013 with the “Gorilla in the Room” being the fiscal cliff. We still stand fairly optimistic that something will get done, but what and how quickly is the unknown. At this point, we are maintaining our appropriate allocation and waiting patiently for a direction of the next 4 years. We still believe that the better growth potential for the foreseeable future is in the stock market, both US and Oversees. We do anticipate a move upward in rates, but how quickly and abruptly will depend on the election.
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