The big question on many exchange traded fund (ETF) investors’ minds is, "Will the current financial unrest work itself out like the savings and loan crisis in the 1990s, or is it going to spread to the real economy?"
The looming real estate problems could spill over into consumer sales and, ultimately, into a full blown credit crisis. Carl Delfeld for ETF XRAY says indicators of how the real economy is performing are jobs, spending and capital expenditures. When we look at these factors, a truly bright side to current economic events emerges. Some reasons to stay positive include:
- Consumer spending likely will stay strong.
- Share buybacks might help soften the blow of weaker share prices.
- Corporate earnings seem to be firm.
- Corporate balance sheets in aggregate have improved.
- The Fed might cut interest rates.
- Valuations are on target in the U.S. and worldwide.
- Global companies and their economic growth are increasing.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.