03.04.2010 / Market Analysis, Posting by Stephen Frantz, FNBO Chief Investment Officer

So far this year we have seen economic data go from less worse to incrementally better. It still appears that we take two steps forward and one step back, but none the less, it is progress. The largest challenge this year will be the Fed beginning to extract the massive amount of money it has used the last 18 months to prop up the United States economy. There is still some question as to the stability and viability of the economy without this support. We would expect to see some modest tests of this policy throughout 2010 as the Fed looks for signals that these extractions are successful.

"We are still optimistic that stocks around the globe will end the year higher."

The equity markets so far this year have been somewhat weak, however a correction after the significant rally we saw in the last nine months of 2009 is healthy and probably overdue. We are still optimistic that stocks around the globe will end the year higher. We continue to be concerned about the significant structural deficit issues of governments around the world and particularly in the United States. Without fiscal discipline, the public sector will eventually crowd out the private sector in competition for resources and significantly stunt the opportunity for many mature debt-ridden economies around the world to grow.

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

Posted at 01:19 PM | Permalink
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