The New Trends – 1st Quarter 2012.
Lets analyze what are we witnessing thus far.
1. In the previous quarter, consumer spending was still bid based on availability of cheap deals and deal based sites were the master of the day, it seems the deals sites in the current interim have now started to bleed, with lack of availability of any new loss making deals, which didn’t go well with merchants and with reluctance of merchants and retailers to go down this path, the deals have not only dried up, as they realize the very little value additions by deals based websites to their business. Case in point, low numbers of groupon and various other deal sites.
The consumer is more cautious and will not pay for anything that he doesn’t need and involves in extensive research in an event he needs anything, be it a product or service. A tight market in general, with uncertain conditions, inability to determine tomorrow. Therefore save for a rainy day, mentality presets.
2. Volume has never been so bad in the markets, bearish bets have declined to almost a five year low, with the Vix breaking down below 15 yesterday, the same remains with retail sales figures across most markets, yet somehow government reports differ, on the dry bulk market, shipping is in a very bad shape.
The above two factors are sufficient to suggest that growth is missing in this stock market rally and till that is fixed, it hard to see how else will the situation turn around.