Greek & French Voters Vote Against Austerity
Monday, May 7th, 2012
U.S. Equities look to open somewhat lower this morning in response to voting results in Greece and France in which voters decididly pulled the levers for those candidates favoring policies of taxing and spending at a greater pace (stimulus) rather than the existing path of austerity. Stock investors are envisioning an unwinding of the European Union, contagaion, as well as inflationary tendencies from devalution in Europe. Time will tell. However, it appears as if the voters in these two countries would rather let Germany pay for their excesses rather than stand on their own two feet.
We think that U.S. Equities will remain choppy at least through Q2 and Q3, but do not see more than a few percentage points of additional downside at this point. After a couple days of selling, perhaps global investors will put some money to work in the United States as it appears to be the best house in an otherwise so-so neighborhood. Stay on your toes. Keep some powder dry.
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