In which direction is the econonmy headed?

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I think a lot of people are sharing my question this morning. The economy has been moving along for awhile, but there are definite warning signs everywhere you look. But if a broad economic recovery is evident, then all ships will be raised by the tides. Investor sentiment is all ready starting to heat up. Others are bit more pessimistic:

Barry Hyman, equity market strategist with EKN Financial, says he’s expecting seasonal weakness in September and October. “This pattern shows up in the technical-overbought status of the market as we enter the post-Labor Day season, as well as the upcoming sets of economic data on inflation that we expect would bring the worry back to the market,” he says.

Mr Hyman has a point. Inflation is one concern that every rational person has. If goods and service keep on going up, the consumer can’t take the pressure and eventually snaps. Credit quality has been declining for awhile, and now consumers can’t use their houses like ATMs

I personally am leary of companies who derive all, or at least most of their revenues from consumers. I think the banks are probably vulnerable, as are all lenders. I feel more comfortable shopping for stocks right now in the B2B technology sector. If you can find a company that sells a products that other companies need, you might have a bit of a hedge before the possible credit crisis hits.

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