"Consensus opinion continues to be too bullish on 2014's U.S. growth prospects. Economists started the year predicting that U.S. GDP would grow at a 3-3.5% annual rate. And they have been wrong,"
Lagarde said during a recent news conference that the economy's contraction in the first quarter was due to harsh winter weather that led to a drawdown in inventories, slower demand and a sluggish housing market.
Despite these gloomy numbers, Voudrie won't go so far as to utter the "R" word. "Remember, the definition of a recession is two quarters of contracting GDP. I'm not predicting a recession in the U.S., but I am pointing out that the consensus U.S. growth opinions are still way too high."
The IMF's new estimate came along with a prediction that the Federal Reserve may leave interest rates near zero for longer than expected. "Policy rates could afford to stay at zero for longer than the mid-2015 date currently foreseen by markets," according to a statement in the fund's annual assessment of the U.S. economy.
The IMF's forecast comes on the heels of the
These more pessimistic numbers don't have to ruin an investor's day, but s/he should note the direction of the numbers and respond appropriately, Voudrie says. First, the wise investor will "recognize that the recent all-time highs in the various U.S. stock market indexes are coming amidst decreasing volume. In healthy bull markets, the volume should be above average on up days and below average on down days. That is not what we have experienced the last several weeks," he said.
"Instead," Voudrie continued,"we have been seeing lower-than-average volume on the up days and above-average volume on down days--something I believe signals internal weakness."
Consequently, Voudrie has this advice for where investors should put their money: "I continue to favor select bond-oriented investments, REITS and commodity-oriented stocks that should do well in an inflationary environment."
A financial services industry veteran with more than 20 years' experience,
Read the full story at http://www.prweb.com/releases/2014/06/prweb11962864.htm
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