Many people are pleased to see 2009 come to an end. Wall Street posted a solid 20% gain and oil prices were well below $100 per barrel. The bad news involved jobs. Month after month, companies shed employees in droves. We can expect the Federal Reserve to leave rates low until the job market turns the corner.
Increases in government spending at the federal level will be partially offset by cuts in local and state government budgets. Somewhere in the later half of 2010, I expect the job market to reverse course as employers slowly start adding people to their payrolls.
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. Will restaurants start filling their dining rooms mid-week?
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.
I expect oil to remain below $100 per barrel.
Overall, 2010 will be better than 2009 as the long slow recovery takes root.
