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06.03.2010 / Market Analysis Recap. Posting by Stephen Frantz, FNBO Chief Investment Officer.

The recent volatility and correction in global equity markets should not be a huge surprise. Over the course of the last 12 months, we have seen equities around the globe rally significantly off the lows reached in March 2009.

"If the clouds lift overseas, and markets begin to discount just ugliness vs. Armageddon, you should see stocks here in the U.S. reignite a rally after a healthy 10 to 15 percent correction."

One year ago the world seemed focused on the possibility of another great depression. This outcome has been eliminated by unprecedented political, policy and monetary action by governments and central banks around the world. Although the world now seems a better place than it did only 12 months ago, significant headwinds remain in the form of sovereign debt issues, high unemployment and consumer deleveraging. We would not expect to see a repeat of the last 12 months performance in stocks.

Over the near term, we expect macro-economic and global concerns to drive investment decisions, leading to continued volatility and selling pressure. On a mid- to longer-term basis, the S&P 500 Index appears attractively valued, trading at about 12 times forward earnings. If the clouds lift overseas, and markets begin to discount just ugliness vs. Armageddon, you should see stocks here in the U.S. reignite a rally after a healthy 10 to 15 percent correction.

For more information on Tributary Capital Management, visit Tributarycapital.com or email info@tributarycapital.com.


What are your thoughts on the equity markets?  Please share your comments.


Comments are provided as general market commentary and should not be considered investment advice or predictive of any future market performance.  Past performance does not guarantee future results.

Investments are: Not FDIC Insured • May Go Down in Value • Not a Deposit • Not Guaranteed By the Bank • Not Insured By Any Federal Government Agency

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