2010 drew to a close with fears of a double-dip recession abating and economic data revealing that the global expansion was intact and gaining momentum. After a mid-year slowdown, the preponderance of economic indicators now point toward a modest reacceleration in domestic growth. For all that was written about the “new normal,” last year looked surprisingly like the “old normal.” Looking forward, the extension of Bush-era tax cuts suggests that the pace of activity will likely accelerate in the first half of 2011 and a second round of quantitative easing (“QE2”) renders a “double dip” highly unlikely. In our view the cyclical equity bull market is not yet over.
