Strong earnings bring buyers back into the markets

Market observations for the week of July 19 to July 23, 2010

Claymore Investments, Inc. 27 July, 2010 | 2:25AM

The major market indices finished the week higher, reflecting solid second quarter earnings, improving economic conditions in Europe, and no "smoking gun" in the European stress test results.

Ultimately, markets are a reflection of what is happening in the corporate world. As such, last week's strong second quarter outweighed concerns over the recent soft patch in economic data. While there is no arguing that the pace of economic growth in the United States is slowing, the good news is that the economy continues to expand and should continue to do so through next year.

While the pace of the recovery has been disappointing, the simple fact is that over the past three quarters, the expansion has averaged about a 3.5% growth rate, which happens to be well above the 2.8% trend line growth average since 1980.

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Claymore Investments, Inc.

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