The stock market is not the end-all indicator we in the Green Industry should watch. Market activity and valuations are useful given we also incorporate the messages sent by other indicators. We have witnessed a long bull market, which begs the question, “Why is the stock market doing well?”
Kenneth Polcari, director of the NYSE floor operations for O’Neil Securities says, “The only reason we’re here is the Federal Reserve induced global monetary easing policy.” In other words, the Fed is supporting the stock market by pumping cash into our economy.  About the Fed’s easing Eddie Katz of Oak Street Wealth Management said recently, “Until the printing ends, there seems to be a floor under stocks, which is a good thing . . . until it’s gone.”
Michael Mullaney of Fiduciary Trust says stocks are doing well because “where else are you going to put your money?” No other asset has a better outlook. Many who have been sitting on cash the last four years are looking for a safe investment with decent returns. Presently stocks are the most attractive.
Aswath Damadoran claims there are good reasons stocks are hitting new highs. “Cash flows are high, continued growth looks good, the macro risks have faded, and the alternatives have lousy returns.”
Bottom line, our economy is in the same boat as the day after the recession ended, which is muddling through a post bubble deleveraging economy.
So how’s the future of the construction and housing market place? For 2013 both sectors will be doing much better. Construction, home building, hit the skids in the recession. Finally building is getting some legs and showing sustained growth. In fact housing starts set a four year high in December.
Most home related contractors report increased levels of quoting and sales activity. So far, 2013 appears to be more promising than 2012. My not so scientific data suggests the same. Most Green Industry contractors I have spoken with say they have more pre-season jobs sold than any point since the recession.
What about claims that a shallow recession or slow down is coming at the end of 2013 or early 2014? Still out there. Several are saying it will be a consumer driven slowdown happening as people notice their real take home earnings are less because of increased taxation and the rise in food and energy costs.
An area to watch. Many expect construction material and fuel costs to increase throughout 2013. While key materials like copper, oil, steel, etc have been decreasing for several months, the experts say declines end as the summer kicks in. Take care when quoting pipe and wire on future jobs!
Still looking positive for the Green Industry. All we need now is some decent weather. Been a long winter!
