This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

4 Things That Matter In the Upcoming Economy

NEW YORK ( TheStreet) -- After the past two weeks investors are legitimately left wondering what else could surprise us? Unfortunately, the answer remains: A great many factors.

As the economic environment struggles to deal with a host of structural issues, it remains vulnerable to disruptive shocks. So a volatile environment looks to be the dominant theme in the markets for the next few years.

Federal Reserve Chairman Ben Bernanke and the Fed continue to matter in this ongoing fiscal crisis, but there's a limit to what monetary policy can do.

Against this backdrop, attention should be drawn to the following:

  • Structural issues matter: What progress is being made against structural issues in the U.S. and other global markets? Austerity is painful in the short term but will ultimately foster stronger and more stable growth. Developing a credible plan at the federal level is essential to provide confidence. Therefore, the next few months are extremely important.
  • The Fed matters: Recent statements are clear indications of the Fed's willingness to support the recovery. There are limits to monetary policy, though, so investors and consumers shouldn't be tempted to view Fed actions as fundamentally altering the direction of the recovery.
  • Europe matters: Europe should not be ignored by investors or policymakers. Effective resolution of fiscal and structural issues in key markets such as Spain and Italy are "must haves" for financial markets to return to a more normal environment.
  • Consumer behavior matters: How are households dealing with the latest shocks to their balance sheets? Will we see further retrenchment? In the first half of the year we saw consumers pull back on spending in the face of numerous challenges. A modest bounce-back in consumer spending is essential if the recovery is going to gain momentum in the second half of the year.

The current economic cycle is all about structural issues, and the focus remains on understanding and anticipating how these issues are affecting short- and long-term economic and financial market conditions.

I continue to forecast slow and hesitant growth, but resolution of the issues noted above is essential to support a healthier economic backdrop.

>To submit a news tip, email: tips@thestreet.com.

RELATED STORIES:







Follow TheStreet.com on Twitter and become a fan on Facebook.

Paul Ballew is senior vice president of customer insights and analytics at Nationwide Mutual Insurance in Columbus, Ohio. Ballew previously served as a Fed economist, a partner for J.D. Power and a senior executive at General Motors.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $130.28 0.00%
FB $79.19 0.00%
GOOG $532.11 0.00%
TSLA $250.80 0.00%
YHOO $42.94 0.00%

Markets

DOW 18,010.68 -115.44 -0.64%
S&P 500 2,107.39 -13.40 -0.63%
NASDAQ 5,070.0260 -27.95 -0.55%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs