Reuters - There is the potential for a downturn in the U.S. economy that could have ripple effects around the world, San Francisco Federal Reserve President Janet Yellen said on Saturday.
***Again, it is all about perception. When everyone is saying "downturn" , the public investors hear "recession". Then, indeed there will be a downturn and a possible recession. The only combat against this is the corporate performance. So far, the housing sector is the one being beaten to the ground. The corporate results have been mixed, but mostly, they look good to me. If corporate results continue to top estimate, and turn in profits, we will avoid the feared recession.
A correction is more likely to happen, after all the climbing the market did. How deep this correction is, depends on the perception of the investors, and the corporate results. While the former can, and will often goes wrong, the latter will not. It may be altered here and there by some cheating accountants, but the overall scenario cannot be manipulated.
Finally, so long as the stocks you hold are chosen not by interim results (ugh!), but by consistent fundamentals, then, applying the words of the Oracle, Wall Street can close for two years, for all I care.
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