by Douglas Coté, Chief Market Strategist, ING Investment Management
The Federal Reserve said in January that there would be no rate increase until 2014. Yesterday, Chairman Bernanke affirmed this pledge through 2014 and presumably the marketâs strong rally yesterday had to do with this reiteration of policy. I donât buy it. This is code to scare investors from the market and the code is that this market is going up due to artificial support from the Fed.
How about a healthier view?
The Fed was wrong on the strength of the economy and upgraded it to "moderate" from "modest" on March 13th. Economic data has been surprising on the upside across corporate profits, manufacturing and employment. In todayâs WSJ, read the virtuous catalysts for growth being driven by an important tectonic shift in Energy including "Steel Find Shale Sweet Spot" and "Planned Pipelines to Rival Keystone". This simply means more economic growth and a lot more jobs. Please see energyâs impact in our 2012 forecast
Fundamentals March Forward Despite Global Risks in 2012. [PDF]
