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Thursday, July 22, 2010

Mid-Year Look Back - Outlook 2010

My most popular blog post this year is by far the Outlook 2010 which was published in early January 2010. I thought it would be interesting to see how well my predictions have fared during the first half of 2010.

We can expect the Federal Reserve to leave rates low until the job market turns the corner.

The Federal Reserve Board has cooperated with business borrowers leaving the over night federal funds rate at record low rates (zero to 1/4%).

I expect oil to remain below $100 per barrel.

Despite the BP debacle, the crude oil markets have remained in check and well below the $100 per barrel threshold.


Stocks should continue the up and down motion as the Dow Jones seeks higher ground. Any increase in consumer confidence will translate into profit since companies have reigned in their fixed costs.

Both the Dow Jones Industrial average and the broader S&P 500 index have seesawed back and forth in the search for direction. Corporate profits are definitely higher than 2009.


Look to travel indicators for signs of increased mid-week business. When airlines and hotels begin to see increased volumes, restaurants will find business travelers in their seats. Don't expect many $100 bottles of wine on business expense accounts this year. Frugal is in vogue.

There was a short clip on CNBC today regarding higher occupancy rates at the Starwood Hotels group. Many of my clients who have a significant business expense account clientele report a gradually improving climate. Guests are reviewing check totals quite carefully.

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