2010 half-time review

US (Over-cooling)

Companies were holding more cash and other liquid assets, signaling they are still hesitant to spend the cash on hiring or expansion amid doubts about the Europe’s debt crisis. Thus, share buybacks is popular in US listed companies now. Analysts’ were continued surprised by the better than expected earnings posted by US S&P 500 companies. However, they view this is unsustainable for the long-run, judging on postpones of companies expansion plans for future growth. Consequently, continue high unemployment rates in US, and weak domestic consumption in the near term.

China (Over-heating)

Due to overheating concern, China had taken some measures to counter it until Yuan flexibility pledge to bring down import prices, as to inflation rate. Fundamental growth story was still intact, coupled with massive internal savings and foreign reserves. China’s cooling measures will stir up volatility in the near term, but it is a positive move to lowering the risk of overheating. Instead, China should be more concern about the well-fare of their low wages labors, whom starting to rear its ugly head towards businesses.

Commodities

Oil        : Move in tight range of between $70-80 per barrel.

Gold     : In the midst of bull-run? (See picture below)