{"id":32003,"date":"2012-08-31T15:34:13","date_gmt":"2012-08-31T19:34:13","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/08\/the-recovery-is-beginning\/"},"modified":"2012-08-31T15:34:13","modified_gmt":"2012-08-31T19:34:13","slug":"the-recovery-is-beginning","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/08\/31\/the-recovery-is-beginning\/","title":{"rendered":"The Recovery is Beginning"},"content":{"rendered":"<p>Article by <a href=\"http:\/\/www.investmentu.com\/\" target=\"_blank\">Investment U<\/a> <\/p>\n<p>Ever since the financial system was on the brink of complete collapse four years ago, it\u2019s been a tough slog.\u00a0 But that shouldn\u2019t be unexpected.\u00a0 This was no ordinary recession.<\/p>\n<p>When someone recovers from the flu, it takes a week or two before they\u2019re feeling 100%.\u00a0 On the other hand if someone was in intensive care with double pneumonia, it\u2019s going to be quite a while before they\u2019re feeling back to themselves.<\/p>\n<p>Well, in 2008 and early 2009, not only was the U.S. economy in intensive care with double pneumonia, but Presidents Bush and Obama, along with Hank Paulson had to break out the defibrillator a few times to revive the patient.\u00a0 The recuperation process was going to be long.<\/p>\n<p>But now the patient is home, up and moving around again and on the road to recovery.\u00a0 There\u2019s still a long way to go, but make no mistake about it \u2013 things are improving:<\/p>\n<ul>\n<li>In August, building permits were up 6.8% from last year.<\/li>\n<li>Employers added 163,000 jobs in July, higher than the 73,000 average from April \u2013 June.<\/li>\n<li>Timber company <strong>Wyerhauser<\/strong> (NYSE: WY), whose revenue is 84% tied to housing, saw second quarter revenue higher than it has been in several years.<\/li>\n<li>More employees are going on strike. According to <em>Barron\u2019s<\/em>, RBC Global Asset Management noted that there have been 17 incidences of walkouts with 1,000 or more employees \u2013 the highest since 2004-2005. That\u2019s a sign of confidence on the part of labor.<\/li>\n<\/ul>\n<h2><strong>Following the Smart Money<\/strong><\/h2>\n<p>In South Florida, one of the hardest hit areas by the popping of the real estate bubble, there are so many new construction projects in my small town, it\u2019s hard to keep track.<\/p>\n<p>Brand new buildings are going up to house restaurants including <strong>McDonald\u2019s<\/strong> (NYSE: MCD) and <strong>YUM! Brands\u2019<\/strong> (NYSE: YUM) Taco Bell.\u00a0 Toys R Us is expanding its store. New strip malls are being constructed when just two years ago, existing ones were vacant.<\/p>\n<p>Housing prices in South Florida rose 2.8% in July, the eight consecutive monthly increase. This is a market where a year ago, you couldn\u2019t give a house away.<\/p>\n<p>And in some parts of Northern California, housing is back to the fervor experienced during the dot come days.\u00a0 A realtor told me of a friend who bid on a house only to be one of 25 people making an offer.\u00a0 Another worked with a client on a condo that received seven offers and went for 9% above the asking price.\u00a0 She now has a client bidding more than 12% above what the seller is asking for.<\/p>\n<p>Last week, I talked about following the smart money. If anyone qualifies as smart money, it\u2019s the management of companies like McDonald\u2019s, YUM! Brands and Wyerhauser.<\/p>\n<p><strong>Intel <\/strong>(Nasdaq: INTC), the world\u2019s largest semiconductor maker is investing $300 million into a new facility in Chandler, AZ.\u00a0 <strong>General Motors<\/strong> (NYSE: GM) will spend $220 million at two factories in Ohio.\u00a0 In October, <strong>Tanger Factory Outlet<\/strong> (NYSE: SKT) and <strong>Simon Property Group<\/strong> (NYSE: SPG) will jointly open a 350,000 square foot retail center in Texas.<\/p>\n<h2><strong>Surprise! Stocks are Up 20% This Year\u2026<\/strong><\/h2>\n<p>Things obviously aren\u2019t all lollipops and rainbows. There are still way too many people who need work and are struggling. We continue to have real problems that need to be tackled. But economies are cyclical and do bounce back, even after the extreme conditions of a few years ago \u2013 and that\u2019s what we\u2019re starting to experience now.<\/p>\n<p>The markets know this. The stock market is a forward looking indicator.\u00a0 It\u2019s likely why stocks have gained over 12% year to date and 20% in the past year.<\/p>\n<p>If the 20% gains of the market over the past year were for a full calendar year, it would be the 22<sup>nd<\/sup> best performance in the past 84 years. The good news is 20% gains in the market has been a good indication of future economic growth.\u00a0 Let\u2019s take a look at the five markets closest to the past year\u2019s performance.<\/p>\n<ul>\n<li>In 1967, the stock market rose 20.02%. The following year, GDP rose by 4.8%.<\/li>\n<li>In 2009 and 1963, the market climbed 19.67% each year. GDP grew 3.2% in 2010 and 5.2% in 1964.<\/li>\n<li>In 1999, the market grew by 19.64% resulting in a 2.9% increase in GDP.<\/li>\n<li>And in 1996, when the market rose by 19.33%, GDP was higher by 4.4% just 12 months later.<\/li>\n<\/ul>\n<p>After so many years of suffering, it may be difficult to picture brighter days ahead, but rest assured, they\u2019re coming.\u00a0 That\u2019s not me being my usual cheerful self.\u00a0 That\u2019s the numbers and executives of some of America\u2019s top companies talking.<\/p>\n<p>After a near death experience, the patient is about to go back to work. Before you know it, he\u2019ll be back at the gym and on the golf course. Let\u2019s stop treating him as an invalid and start recognizing that things will return to normal.<\/p>\n<p>Good Investing<\/p>\n<p>Marc<\/p>\n<div>\n<a rel=\"nofollow\" target=\"_blank\" href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=HRthKPNLuV0:wCw68qpV554:yIl2AUoC8zA\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?d=yIl2AUoC8zA\" border=\"0\" \/><\/a> <a rel=\"nofollow\" target=\"_blank\" href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=HRthKPNLuV0:wCw68qpV554:V_sGLiPBpWU\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?i=HRthKPNLuV0:wCw68qpV554:V_sGLiPBpWU\" border=\"0\" \/><\/a> <a rel=\"nofollow\" target=\"_blank\" href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=HRthKPNLuV0:wCw68qpV554:qj6IDK7rITs\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?d=qj6IDK7rITs\" border=\"0\" \/><\/a> <a rel=\"nofollow\" target=\"_blank\" href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=HRthKPNLuV0:wCw68qpV554:gIN9vFwOqvQ\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?i=HRthKPNLuV0:wCw68qpV554:gIN9vFwOqvQ\" border=\"0\" \/><\/a> <a rel=\"nofollow\" target=\"_blank\" href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=HRthKPNLuV0:wCw68qpV554:F7zBnMyn0Lo\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?i=HRthKPNLuV0:wCw68qpV554:F7zBnMyn0Lo\" border=\"0\" \/><\/a>\n<\/div>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/InvestmentU\/~4\/HRthKPNLuV0\" height=\"1\" width=\"1\" \/><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/SyndicationFeed\/~4\/qqPX5fYteW8\" height=\"1\" width=\"1\" \/><\/p>\n<p>Article by <a href=\"http:\/\/www.investmentu.com\/\" target=\"_blank\">Investment U<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Article by Investment U Ever since the financial system was on the brink of complete collapse four years ago, it\u2019s been a tough slog.\u00a0 But that shouldn\u2019t be unexpected.\u00a0 This was no ordinary recession. When someone recovers from the flu, it takes a week or two before they\u2019re feeling 100%.\u00a0 On the other hand if &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/www.investmacro.com\/forex-news\/2012\/08\/31\/the-recovery-is-beginning\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;The Recovery is Beginning&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-32003","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/32003","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=32003"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/32003\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=32003"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=32003"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=32003"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}