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Grand Blanc, Mich. (MarketWatch) - The stock market has managed to grind higher for more than a year without experiencing anything even close to a 10% correction along the way. While the steady advance of stocks in 2013 may be rare, we don't believe it will falter in November. Through year-end, mutual-fund managers and hedge-fund managers will more likely be buyers than sellers as they try to play catch up in a stellar year for stocks.

At least for a while, investors don't have to worry about the impact of a dysfunctional Congress on the stock market. This is certainly something to be thankful for after what we endured as citizens of this great country in the first two weeks of October. Add to that the other adverse factors not currently impacting the markets, as well as the synchronized growth story developing around the globe, and we have an environment supportive of a further advance for stocks in the near term.

The threat of a U.S. entry into the war in Syria, the Fed taper scare, the government shutdown and the latest debt-ceiling crisis are all behind us for now. Weaker-than-expected nonfarm payrolls reported in mid-October all but made certain the Federal Reserve will not consider tapering quantitative easing (QE) any time soon, keeping monetary policy very accommodative. The markets won't refocus on the debt-ceiling debacle until sometime in late-December or January. So, the primary worries for the markets of a month or two ago have been kicked down the road.

The third-quarter-earnings season started with a record number of S&P 500 companies issuing negative guidance. However, once again, corporations have delivered many upside earnings surprises. Indeed, this earnings season will end up much better than many had expected just a few weeks ago.

Another positive is the synchronized growth recently forming among many of the developed countries around the world. After several years of uneven and largely de-synchronized dynamics for these economies, global growth in unison for these countries bodes well for stocks.

Many major macro indicators show that the U.S. economy is improving, including falling unemployment, an increase in capital-goods orders and a growing housing sector. ...

...This overall global macro environment, along with diminishing impediments for the U.S. stock market, supports a continued risk-on trade. Government wrangling over the debt ceiling will return to haunt the markets, but that is next year's problem. For now, investors should favor stocks over bonds, and high-beta and cyclical plays vs. defensive sectors.

The PowerShares QQQ Trust Series 1 (NASDAQ:QQQ), which represents the Nasdaq 100, offers a high-beta bet for investors in large-cap companies. In a risk-on environment, the Nasdaq 100 stocks are sure to participate in a rally. ...
 


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