Regional Specialists Review May 2013
The debt ceiling and threat of a U.S. government shutdown have come and gone (for now), while sequestration has come and stayed. And still, the market rallies.
There is a clear sense that "things are improving". To us, it's not so much that the economy has improved but rather that the number of visible crises has abated, which has permitted investors to recognize 1) that key fundamental forces have been and remain relatively positive, and 2) there are few obviously profitable places to put one's money.
So, is there anything scary left under our beds? We're watching slowing earnings growth, reduced fiscal stimulus, Europe and emerging markets weakness.