Is the foreign slowdown wave ready to wash up on OUR shores?

The latest figures make one thing abundantly clear to me: Europe is mired in recession. Asia is slowing as well. Despite the building size and strength of this global slowdown wave, the U.S. has so far remained afloat.

But is that game almost up?

Is that slowdown wave about to wash up on OUR shores?

That’s what I’m expecting. And I find it hard to believe stocks can continue to power ahead if that’s the case!

European recession deepening as joblessness surges,
PIIGS sink deeper into the slop!

For all the European Central Bank’s monetary largesse, the real economy over there sure is struggling.

In the fourth quarter of 2011, the collective economy of the 17-nation euro region shrank 0.3 percent. That was the first time the economy contracted since 2009. And so far in 2012, things haven’t gotten better.

They’ve gotten worse!

A European economic confidence gauge dropped to 94.4 in March from 94.5 in February, compared with expectations for a rise. An index of European manufacturing activity slumped for the eighth month in a row. Unemployment, for its part, rose to 10.8 percent in February. That was the highest since 1997!

Boatloads of euros from the ECB haven’t helped the PIIGS one iota.

Then there are the “PIIGS” countries — the ones that have received the lion’s share of the financial support from the ECB and the fiscal authorities. We were told all the borrowing and spending would help their fortunes improve. But boy is that proving to be a pipe dream!

Irish retail sales fell 1.9 percent from a year earlier in the most recent period, the largest decline since last fall. Greek bank deposits are plunging at the fastest rate in 11 years as citizens yank money out of institutions they worry will fail.

Portugal just warned the economy will shrink by 3.4 percent this year, more than double the rate of contraction in 2011. And Spain is expecting a 1.7 percent decline in its economy this year, with total debt on track to rise to 79.8 percent of GDP. That would be up from 68.5 percent in 2011 and the highest since the country became a democracy in 1978!

Warning Signs Popping Up
Elsewhere Too!

Conditions in Asia don’t look so hot, either. Japan’s economy slumped 0.7 percent in the fourth quarter, while India’s economy grew at the slowest pace in three years. In China, manufacturing activity is shrinking at the fastest pace in three years, and home prices just suffered the most widespread declines in a year.

All that brings me back to the U.S.

We continue to see a mixed batch of data. The ISM manufacturing index rose slightly to 53.4 in March from 52.4 in February.

But construction spending tanked 1.1 percent in February, the biggest drop in seven months! The decline comes on the heels of a 0.8 percent drop in January, confirming once again that all the talk of a huge new housing boom is a bunch of hogwash!

When it comes to investing, I continue to like select stocks and asset classes — those that can maintain their recent strength. But I’m also on alert for signs that the massive, money-printing rally is running out of steam, and that the global slowdown wave is washing up on our shores.

So I’ve been taking some gains off the table, and I recommend you do too. Would you like to join me — risk free? Click here to learn how.

If I’m right, and the U.S. is set to slow further like the rest of the world already is, earnings and stock prices could suffer!

Until next time,

Mike