After the frenzy and the excitement of the New Year celebrations, yours truly is back amongst the midst of writing the blog. The weekend saw parties aplenty in numerous corners of the city with international artists gracing the occasion. Now the denizens of the city have retuned back to normalcy and the markets have opened with expectations. But these expectations have hit a dent as all is really quiet on the western front.

The title for today’s article comes from a book written in 1929 by Erich Maria Remanque, a German veteran from the Great War. One of the major themes of the novel is the difficulty of soldiers to revert to civilian life after having experienced combat situations. The global investors can relate to the novel as they too have been attacked by financial crisis shells since 2008, first with the US subprime crisis then with the ongoing Greek Tragedy and greater Eurozone, and finally the US debt ceiling debate last summer. Separating these ongoing financial flare ups are periods of temporary respite in which central banks wave their monetary white flags and venture onto the battle ground in their QE ambulances to help the wounded oversold stock markets off the ground and foster strong rallies later on. During these periods of normalcy, investors display a great deal of apprehension to venture back into the markets after just seeing their portfolios shelled by the cannons of financial instability.

However, taking an objective approach to analyzing the market and economy can provide clues to see if it is still “All Quiet on the Western Front” or if another financial battle is about to be waged. When surveying the U.S. economic landscape it appears the former has been true ever since last fall, though the ringing from the guns of the East (Europe/China) can still be heard. As long as they remain at bay and things remain quiet on the U.S. Western Front, global investors should still have several more months of a temporary reprieve ahead in which they may emerge for a time to enjoy the sun and tack on some gains to their portfolios before returning to their investment bunkers as the financial sirens blare once more.

Currently things are “All Quiet on the (U.S) Western Front”. Europe will have to be monitored closely to see if things heat up once more and the price action of European banks will likely provide us some clues. As long as things do not flare up again in Europe the strengthening U.S. economy will likely allow U.S. stock markets to rally further once the current intermediate correction ends. But until then, we likely have several months of favorable economic market action ahead of us.