Market Outlook: 02-27-08

Robert Hsu, February 27, 2008

Even though the United States has experienced a lot of economic turmoil over the past few months, I believe the economy remains resilient outside of the housing and financial services industries. Recent reports from the country's leading retailers indicate that consumer spending has held up well. Yesterday, quarterly earnings from retailers Nordstrom and Macy's were released. The reports showed that upper-middle-class consumers are still spending. Though the spending growth is slowing down, firm employment levels at high-wage jobs are keeping higher-end American consumers active.

Given the strength in U.S. consumer spending, I'm becoming more bullish. In March and April, I believe the S&P 500 Index will move into a higher trading range between 1320 and 1440 in the next several weeks. This means that we need to adjust our strategy a little bit. Learn more about my strategy in bullish – and bearish – times by becoming an Asia Edge subscriber today.

In this environment, it is important to be well-positioned in companies that are benefiting from major global trends, like rising inflation, a shortage of natural resources, strong demand for basic materials, and the re-emergence of China and Russia. These themes will continue to influence markets around the world for the foreseeable future as the U.S. struggles with weakening housing and financial sectors.

To get the latest updates on the market and which stocks Robert Hsu is recommending now, join Asia Edge.

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