Is this a short term rally or a longer term market taking shape?
Answers
3963 points
MNSL answered 11 months ago …
Positive news:
DOW broke psychological barrier 9000 today.
The S&P 500 rose 3.2 percent to 931.8
Friday’s trading might not be the best indicator of market sentiment. We have to wait and see how the market fares next week including volume.
I think we will see more and more volatility in all types of market in the next 10 years. There will be sector based bull markets in the future.
We will also see more and more many short term rallies and short term down turns in 2009 and in the next 10 years.
Market timing and selection of correct sectors, correct instruments, correct markets and correct countries will be very important in the next 10 years. For example resources market such as Australia, Canada and Mexico and markets such as Singapore, Hong Kong, UK, Dubai and Malaysia will underperform market in the next 18 months.
In emerging market China and Brazil will have edge if they can maintain their growth momentum especially in the 2nd half of 2009. In India commodity sector, property sector and technology sector especially software sector will hit hard in 2009. However few sectors will outperform market in India. Some banks in India stronger than banks in developed worlds. Russian market will struggle in 2009 unless they maintain their growth momentum in 2009.
There will be more volatility in the US Market. We will see some sort of stability in 2009 and year will end up with positive market news, if they can bring some solutions to present credit mess and debt trap. US should not over consume products of other countries. They should manufacture small fuel efficiency cars in the future and then should reduce buying foreign cars. Steps should be taken to increase employment.
In sector wise health sector, commodity sector, property sector, auto sector, electronics sector, vice sector, some productions sectors such as tyre, garments, ceramic sector, steel and iron , weak bank and insurance sector will underperform market in the next 18 months. Bubble in the real estate in Asia has not burst yet. I think property sector is overpriced by more than 70% in emerging, developed and less knows countries in Asia. We will see one of the worst burst in property sector in Asia during next 10 years.
Some companies with exposures to heavy debt and with falling demand for their products will become bankrupt. There will be wave of retail stores and garment closures worldwide in 2009.
Pl see following link:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aVHZBX7xtycs&r efer=home
U.S. Stocks Advance, S&P 500 Jumps to 2-Month High; GM Rallies
The markets will see beyond the current bad economic data and begin a broad-based move upward in the next three or four months.”
The S&P 500 rose 3.2 percent to 931.8, capping its first three-day gain in five weeks and best start to a year since 2003. The Dow Jones Industrial Average increased 258.3 points, or 2.9 percent, to 9,034.69. The Russell 2000 Index of small U.S. companies advanced 1.3 percent.
Stocks in Europe and Asia rose today, trimming losses from last year’s record slump in the MSCI World Index, as investors speculated governments will step up efforts to revive the global economy.
‘Worst Has Been Seen’
The S&P 500 decreased 38.5 percent in 2008, the most since the 38.6 percent plunge in 1937, and sank to an 11-year low on Nov. 20. Volatility increased, with the index rising or falling at least 5 percent in a single day 18 times during the year
“
The worst has been seen,” Jeffrey Saut, chief investment strategist at Raymond James & Associates in St. Petersburg, Florida, told Bloomberg Television. The firm manages $190 billion. “I’m not looking for a super year in 2009; I think we’ll do better” than in 2008
Priced In’
“A lot of the bad news is priced in,” said Matthew DiFilippo, director of research at Indiana, Pennsylvania-based Stewart Capital Advisors LLC, which manages $1 billion. “From an economic perspective, we don’t expect good news for some time. In the long run the economy’s going to turn and earnings are going to improve
731 points
thinker70 answered 11 months ago …
People in general tend to have short memories so I am not that hopeful that the LESSONS that SHOULD have been learned from the economic collapse this past year will actually be internalized by very many and result in positive chamges! What happens in the next year or two econmically depends on what millions of individuals decide to do (or not do) in response to the difficulties we currently face.
Unfortunately the government is NOT setting a very good example. What is desperately needed is for people to focus on SAVING and paying down debt, not contracting MORE! Debt for consumption is poisonous, yet the emphasis by government to RESCUE the economy is to get people SPENDING, but that is putting the cart before the horse.
The printing press money they are throwing at the problem (excessive DEBT) is only going to PROLONG the agony by E_X_T_E_N_D_I-N-G the time period in which the economy REMAINS unsrtable! TRILLIONS in new dollars can only DILUTE the value of all existing dollars producing ever higher levels of inflation and DEEPEN the average familiies indebtedness with HIGHER TAXES eventualy being required to pay back these new debts foisted on the taxpayer while the FAT CAT corporate executives whose companies are being bailed out, laugh all the way to the bank!
My prediction is that while the stock market may indeed rally from time to time, we will remain in a bear market for many years, UNLESS the government sets the example by dealing with FUNDAMENTALS instead of just papering them over, and individuals take control of their own FUTURE spending power by SAVING and paying down debt.
One only needs to COMPARE the DROP in the dollars purchasing power since 2000, (about 40%) with the INCREASE in the price of Gold in the same time period to KNOW where your savings should be going.
Somebody should remind the government that you can not BORROW your way out of debt, but as individuals we CAN RESIST their urgings to go further intoi debt and RECONIZE that they are trying to INFLATE AWAY their debt by deliberately debasing the dollar. The BEST way for individuals (as it would be for government) to come out ahead is to invest in REAL MONEY, Gold and Silver! That is the primary psychological barrier that needs to be breached, accepting the FACT that fiat money is COUNTERFEIT and you need some of the real stuff to survive the chaos still ahead to come out the other end with your PURCHASING POWER not just intact, but greatly ENHANCED!
