If the market had opened Monday it could have been rough sledding as President Obama came out swinging on taxes and entitlements and on grand global themes like the need for America to save the world from climate change. These things sound expensive and are drags on the economy. President Obama went on to say:
"They do not make us a nation of takers. They free us to take the risks that make this country great."
He was referring to Medicare, Medicaid and Social Security, although I guess alluding to welfare, food stamps and all the other programs and freebies that speak of compassion and helping our fellow man. There wasn't much about our fellow man helping himself. President Obama ditched the need for a great speech to deliver a shot across the bow. It's going to be an ugly four years where all the foundations of the nation will be attacked.
Yet, I'm very bullish on the stock market. I think there is huge potential; in fact, this could be the year the stealth rally sparks a few water-cooler conversations.
Stock Market Bullishness
My bullishness comes from several factors of which many have already begun and should pick up steam. The next leg of the market rally will not be a reflection of the US economy. Instead it will be driven more so by the global economy coupled with tepid domestic GDP and a move into positive territory in Europe. But this is about China coming on strong and the rest of world following behind. China will add almost three times more to the growth of the global economy than the United States in the next year. India and "other Asia" will match the impact to GDP growth of the global economy.
Emerging nations will add more than 300% more than advancing nations.
> Global Economy
> Global Peace
> Great Rotation
US companies are poised to benefit big time from the growth of the global economy. The companies in the S&P 500 get more and more of their revenue and profits from outside the United States. The rest of the world is growing, having stumbled with growing pains and global recession. There is a certain kind of determination. The great news is that American companies are riding those waves.