The market was up a lot on Thursday, flat on Friday and up a little today. This may or may not be important but regardless there are some big themes that should not be forgotten as the market does whatever it will do for the rest of the year and in 2007.

If you read the Barron's interview with Ned Davis this will look familiar as it is his comments that are behind this post.

Demand for oil is growing faster than new supply. In the interview, Davis cites similar per capita numbers that I have cited in the past that I got from Puru Saxena interviews on CNBC Asia. Per Davis, and similar to Saxena, the US uses 25.8 barrels of oil per year, China 1.8 and India 0.8. Is there any doubt that those last two numbers will go up?

This guarantees nothing but creates a clear path. Keep in mind this opinion has nothing to do with this year's driving season or hurricane season. This is a multi year theme that I first realized a few years ago and will likely continue for quite a while longer, think years.

The various US deficits and imbalances are large and getting larger. Last I heard, Bush plans to cut the budget deficit in half by 2009. Every economic thing he has tried to do has fallen short of his expectations and I can't see why this would be different. This is not to say his policies have not helped, just that they have done less than what was expected.

Growing deficits create a clear path to a weaker dollar over the next few years. It is in no one's interest, globally, for the dollar to crash but weakness for the rest of the decade without a crash might be a different story.

The period of super easy money is over. There are consequences for big changes in global liquidity. The US started going back to normal a while ago and Japan is just starting now. Money is/will become more expensive. This should cause (perhaps this has started already) capital to move around. I think this means surplus and commodity countries would benefit.

None of the thoughts here are new. In a big picture sense, these are important themes. This helps lay out some of the obstacles faced in the years ahead. The US stock market could do very well in the face of this of course but great returns probably means overcoming high oil prices, higher interest rates and a weak dollar. And let's be clear, great returns are possible.

Some exposure to things that benefit from higher oil, a weaker dollar and a reduction in global liquidity seems like a good idea for the rest of the decade regardless of what happens this summer.