Now that Europe has taken steps to right itself, the US economy and stock market have a better chance of moving forward before America votes for its next president, says David Callaway of MarketWatch in this exclusive interview with MoneyShow.com.

All eyes are on the US economy to find out what’s going to happen next, and our guest today is David Callaway to talk about where he sees the economy going for the rest of 2011. So David, I’ll just ask you, where is it headed for the rest of 2011?

I think it’s getting a little better. A couple of months back, at the late end of summer, we were worried that we were heading into a new recession, a double-dip recession, but all of the recent economic indicators have pretty much turned around, and there’s been a string of good news.

It’s been kind of overshadowed by some of the uncertainty going on in Europe, but it is indeed happening. It will be interesting when we start to get some more jobs numbers and stuff like that. All the other indicators seem to be a little better.

Now that doesn’t mean we’re out of the woods and it’s good times again, but I think as we approach the end of the year we’re going to start to realize that there is a gradual economy starting to grow again and that is good for the market.

What about the housing market as it affects that? People say that we can not have a really true recovery without a recovery in the housing sector.

Well I believe that’s true, and we have yet to see any sort of meaningful recovery in the housing sector. The indicators we’re getting out of the housing sector are that it’s still bumping along on the bottom there but it’s not getting worse. That’s a good sign.

If we continue to see some economic activity, we can generate some jobs that will then translate into growth in the housing sector. Now a really robust healthy housing sector is probably still years away, but if we can just have some sort of growth that will help rebuild confidence in a lot of people.

You mentioned jobs, because I think everybody thinks it’s obviously vitally important. Do you see areas where you see job growth starting or getting stronger?

Well, I think before we can really start to see meaningful job growth, we have to have some sort of recovery in the financial services sector. That’s where the Euro is really hitting our banks hard.

That’s the type of uncertainty that needs to be removed so that banks can start generating profits again. Then they can start lending again, and then we can start seeing some companies taking advantage of that to start creating jobs instead of hoarding money, which is what most of them have been doing. That’s really the catalyst.

I think that if we can get past the Euro situation and into at least some sort of holding pattern in Europe, we can start to focus again on job growth in the US. Again, it’s not going to be a major move—at this time next year, when we have the presidential election, I’d be surprised if unemployment is much below 9%—but I believe it will be below 9% and at least heading in the right direction.

You bring up a good point about the presidential election next year. That’s usually good, an election year, for the stock market. Do you see the stock market starting to take advantage of that?

Well, I think it will. That will be tied into the growth in the economy. The economy is not going to grow so much that President Obama is going to have smooth sailing during the election year, but it will be moving in the right direction.

The one wild card, really, are the protests, the stuff we’re seeing like Occupy Wall Street, the Tea Party. I think this election campaign is going to be more divisive than we’ve seen in a generation, and potentially violent. If that is the case, then there are some certain things to worry about in the market.

You mentioned Occupy Wall Street. Do you think they have a point? Wall Street seems to be the bad guy, but it could be a scapegoat. What are your thoughts there?

I think they do have a point. They’re not actually displaying it, because there are so many different things they want, but collectively what they want is to be recognized.

They believe that Wall Street and the government are in some sort of collusion, which I don’t necessarily agree with. But I believe we’ve built ourselves into a situation where Wall Street has been allowed to grow to a situation where it can cause a crisis which will affect all of us.

So I think they’ve got a point. They’re angry, they want to be recognized…that’s all they really want.

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