Housing, Manufacturing Sectors Benefit from Economic Stimulus
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As the Dow moves back above the 10,000 level today, some are looking at the effects of economic stimulus on different sectors. As might be expected, reports MarketWatch, housing and manufacturing have been benefiting from efforts to stimulate the economy, according to the Fed’s Beige Book:
“Not surprisingly, the two sectors the book highlights as ‘leading the more positive sector reports among districts’ were real estate and manufacturing, among the hardest hit sectors of the economy and the two benefiting the most from government support,” said Dan Greenhaus, chief economic strategist at Miller Tabak & Co.
The Beige Book “supports the notion that the U.S. economy is experiencing a slow recovery, with significant aid from government stimulus programs such as the first-time homebuyer credit and the recently expired cash for clunkers,” said Nicholas Colas, ConvergEx chief market strategist.
Clearly, there is a long way to go in terms of economic recovery. But the stock market is an indication that investors, at least, are hopeful that economic recovery on the way. Well, sort of. Today’s stock market earnings are almost exclusively in the form of the Dow. The S&P 500 is barely managing to stay in the black, and the Nasdaq is lower. But earnings have been providing a measure of confidence and optimism. And the fact that there still remains close to 80% of the stimulus to spend means that the government is likely to find more sectors to prop up in the future, in the hopes of buoying up the economy.
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.
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