Uncertainty Remains As Investors Are Concerned About Future Growth Prospects

Franklin Roosevelt said in 1933, " We have nothing to fear but fear itself." The Majority of analysts and investors are seeing nothing but doom and gloom. It is important to remember that nothing lasts forever and like all the crisis events over the years this to shall pass. Many will look back at this market talking about what a great buying opportunity it was.

This is one of those rare occasions when smart investors can pick up great companies for pennies on the dollar. Similar to periods such as 1907, 1920, 1933, 1982 and 2002 just to name a few examples. Historically, stocks have outperformed every single investment consistently over time. Regardless of high energy prices, wars, or real estate implosions. Many choose to sit in cash waiting until they " feel better " about things. However, that sets them up to miss out on the good buys only to chase the market when it has already ran.

Bottom Line: At today's prices stocks are a screaming buy. The S&P 500 is trading at a 2008 PE multiple of 14. Many companies are trading far below that. Also, after seeing 2007 earnings drop by 6%, 2008 earnings should grow at 5% and even more next year. Buying stocks during the Bear Markets ensures that you will catch the big bounce on the way up.

Economic Growth Continues Despite Credit Woes

Despite all of the economic worries the economy is continuing to still show positive GDP growth. The first quarter GDP came in at +1% and manufacturing has rebounded into expansion territory. All of this taking place in the backdrop of high energy prices and a credit crunch. As we move into the next week many will be watching the second quarter earnings reports to gage how well corporate profits have been holding up.

Bottom Line: Despite all of the woes we expect GDP growth to come in at +1.5% for 2008. Thanks to strong exports and the economic stimulus package. We do not expect the Fed to raise interest rates until early next year. The dollar should fall to a new low against the Euro. But then will recover to about 1.52 as the European Economies continue to slow. Oil prices will continue to fall as world wide demand declines. However, the price will continue to remain high on a historical basis.

Upcoming Events and Economic Numbers

Monday July 21

Leading Economic Indicators consensus: -.1% prior: .1%

Wednesday July 23

Oil Inventories prior: 2.952M

Beige Book

Thursday July 24

Jobless Claims consensus: 372K prior: 366K

Existing Home Sales: consensus: 4.95M prior: 4.99M

Friday July 25

Durable Goods: consensus: .1% prior: 0.0%

Consumer Sentiment

New Home Sales: consensus: 505K prior:512K

Upcoming Earnings

Monday July 21

American Express (AXP): Before the open estimate: .85

Apple Inc. (AAPL): After the close estimate: 1.08

Texas Instruments (TXN): After the close estimate: .46

Tuesday July 22

Caterpillar (CAT): Before the open estimate: 1.54

DuPont (DD): Before the open estimate: 1.07

Freeport McMoran (FCX): Before the open estimate: 2.43

United Parcel Service (UPS): Before the open estimate: .85

Yahoo (YHOO): After the close estimate: .12

Wednesday July 23

Amazon.com (AMZN): After the close estimate: .26

Bidu.com (BIDU): After the close estimate: .97

AT and T (T): Before the open estimate: .76

Pfizer (PFE): Before the open estimate: .54

Thursday July 24

3M (MMM): Before the open estimate: 1.25

Dow Chemical (DOW): Before the open estimate: .85

Wynn Resorts (WYNN): After the close estimate: .92

Stock Buys

Freeport-McMoran Copper and Gold (FCX). We started recommending this at 86.95 and continue to like it on the pullbacks. FCX is trading at a forward PE of 7.80. It has hit long term support levels of 98.00 and remains in the long term up trend. FCX will be reporting earnings on Tuesday. If Freeport-McMoran beats their numbers and their forward guidance is good, shares, could easily take out the 52 week high of 127.24.