(as of 7:10 AM PST)
The rally continues this morning, although modestly to start the day, with US stocks up fractionally. It is a continuation of the month long rally that just won't quit. It is hard to think that just about six weeks ago investors were in a state of sad despair, looking at loses of over 10% across the board, with some indexes down over 20%, the definition of a bear market. Yet it is important to note that just as it is hard to see out of the valley of despair that we were in earlier this year, it is also hard to see potential flaws in the global economy when we are in this state of unbridled euphoria. It wasn't as bad as it seemed then, and things are not as good as the market would seem to indicate now. Nonetheless, stocks are back to breakeven for the year, continuing to ride the surge in the price of oil. International markets are mostly higher while precious metals are giving back some of yesterday's broad gains. The weakness in the dollar has spurred optimism in international markets, especially emerging markets. With corporate earnings season upon us, it will be hard for markets to continue to rally, since most analysts have fairly dismal projections for corporate profits and as go profits, so goes the markets in most cases. While it is good to savor current gains it is possible that stocks will enter a period of profit taking and consolidation in the not too distant future.
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