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Stock Market – Up or Down? Please Vote

Wow, it’s been quite the interesting ride the past few weeks.  I kept hearing rumors of a market correction before the election and then a market climb as the Republicans take back the house and possibly but not likely the Senate.  It’s been quite the opposite as the market continues upward hitting new highs.  So has the market recovered and will it continue to climb, or will we see a significant drop (defined as 6% or greater drop in the Dow) before the end of the year?  I’ve spoken to as many people predicting gloom and doom as I have people thinking we have turned the corner to recovery.  The pros and cons of a continued strong  stock market:

Pro’s
It’s earnings season and so far the results have been pretty good.  Profits are up, guidance is for the most part more positive than negative.  Unemployment is down, companies are cash rich and expectations are for a strong retail holiday season.  That all sounds good huh.   See, the recovery is HERE.

Cons
Not so fast, although the above is true, although profits are up, gross margins are not.  The jobless rate has not come down.   Companies are buying back stock or buying other companies, but they clearly are not hiring.  There is talk of quantitative easing (in essence printing more money to stimulate the economy) but that is a short term fix that will cause more damage long term  Not to mention the rising deficit.  Need I say more.

So now it’s your turn to weigh in.  Please leave a comment and let me know what side of the fence you are on and why.  Your opinion matters!