In what is being dubbed as the worst start to a new year in ages, oil, Russia, and Greece are capturing most of the headlines. However, there may another factor lurking which could be causing some investors to fret. Namely, the state of the U.S. economy.

Coming into 2015, the consensus view was that the economy of the good ‘ol USofA was doing just fine, thank you. This was reinforced by the final revision to the Q3 GDP report, which surprised just about everyone with a reading of 5.0 percent.

The annualized growth rate for the U.S. was far better than the expectations for a rate of 4.3 percent, above last quarter’s stellar rate of 4.6 percent (which many argued would not be topped any time soon), and the best rate of growth for the U.S. economy since the third quarter of 2003.

So, as investors looked ahead to the new calendar year, it is safe to say that a great many saw the solid economic growth to be supportive of the ongoing bull market – and perhaps even a reason to believe that the bulls could continue to romp into 2015.

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The better-than-expected economic growth seen in the U.S. was also used by the bull camp as a reason to ignore the #growthslowing issues in places like Europe and China. Investors were reminded at every turn recently that the U.S. is a “closed economy” and since the consumer represents 70 percent of GDP growth, well, things were looking pretty good.

The Fly in the Ointment

One of the interesting aspects of the stock market game is that by the time “everyone” sees a reason for stocks to continue to climb, that “reason” tends to already be priced in. And the bottom line here is that this just might be the case at the present time.

Read the rest of the report…


David Moenning

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David Moenning is Mr. Moenning is President of Heritage Capital Research, a privately owned, investment research firm. Heritage focuses on active risk management and an “own the best and ignore the rest” equity selection strategy.

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Positions in stocks mentioned: none

The opinions and forecasts expressed are those of David Moenning, President of Heritage Capital Management (HCM) and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security or Heritage Capital program. No part of this material is intended as an investment recommendation. Neither the information nor any opinion expressed constitutes a solicitation to purchase or sell securities or any of HCM’s programs. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that investment objectives outlined will actually come to pass. Investors should consult an Investment Professional before investing in any investment program. Neither Mr. Moenning or Heritage Capital Management nor any of their employees shall have any liability for any loss sustained by anyone who has relied on the information contained herein. Mr. Moenning and employees of HCM may at times have positions in the securities referred to and may make purchases or sales of these securities while this publication is in circulation. The analysis contained is based on both technical and fundamental research. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.