(This post originally appeared at the author’s blog)
More bad news for investors who were hoping for a big first half boom in the markets. The ECRI is now reporting that the recovery is likely to “throttle back” by the middle of 2010. That could likely mean more near-term equity market volatility as investors position for a potentially weaker economy in the coming 6 months.
The weekly leading index fell to 130 from 130.9 last week. The annual growth rate also continued to decline falling to 19.7% from 21.5%. ECRI Managing Director Lakshman Achuthan is not worried about near-term economic growth, but says the longer-term picture is no longer as clear as the economy is likely to slow by the middle of 2010:
“While the U.S. economic expansion is well set to strengthen in the near term, the current easing in WLI growth to a 25-week low suggests that growth will begin to throttle back by mid-year.”
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