Good questions:1) We're only 5% away from what is considered full employment, so if using the 90% as you are, it's not like it's EVER at 100%.2) Contrary to what you hear on Fox News, employee compensation has risen in 2010.3) Those WITH jobs are more confident than ever that the big job cutting is over, and so they are more willing to spend.4) Those with jobs have curtailed spending for 2+ years and so now this Christmas, they are going to buy things as gifts that they have been putting off. I'm in that boat. I'm finally going to get a Wii and an HD TV.5) Cyber Monday has already shown a 20% increase over last year's online sales. Part of that is just that all online sales will still increase for a while yet as more and more are internet savvy, but even considering that, a 20% increase is big.6) No one said anything about 11,000 Dow being the same or better than 11,000 in 2006. Inflation though since 2006 is VERY small.
6) All projections are that this Holiday season is going to be huge.
A Dow that is continuing to hover at 11,000 is not reflecting reality. Even with some of the global concerns, this market is lower than it should be.
a) All projections are that this Holiday season is going to be huge.
b) A Dow that is continuing to hover at 11,000 is not reflecting reality. Even with some of the global concerns, this market is lower than it should be.
I want reasons to think positively, so don’t get me wrong, but with that being said, the following is what I think of points (a) and (b), above.
a) How can this season’s holiday sales be huge if 10% of the country doesn’t have a job, and the 90% that does have a job has either seen:
i. Under employment, which isn’t captured in the current 10% unemployment snapshot
ii. A pay decrease because of employer cost-cutting measures
iii. Flat pay (at best)
b) Is there not any thought that a Dow of 11,000 today isn’t the same as a Dow of 11,000 that we saw in early 2006, which would also be different than the Dow 11,000 that we saw in 1999. Why, you ask? Inflation. Dow 11,000 isn’t comparable across all time periods.[/quote]