Subject: Two Big Reasons to Believe the U.S. Stock Market Will Bounce Back
URL: http://mney.co/1QexYrQ
There's been a lot of cheerless news coming out of Europe lately, and that's taken a toll on the U.S. stock market. But I want to take this opportunity to offer up some positive points and remind investors that it's still too early to declare the bull-market dead, and even more premature to fret over a new bear market beginning.
Corporate profits have been strong and are likely to hang tough for the remainder of the year.
And the recent market decline has been in line with previous bull-market corrections.
I generally have a positive attitude about the future – when I think long term. However, there is a short term influence that I suspect may have a negative influence in economic attitudes on the part of the media and general public. The housing rebates are no longer available as of April 30 for new home purchases. When the may and particularly the June data is released I would expect some "oh, woe, me" responses.
Of course the earnings of many companies are up Jon. The downturn in the economy has given smart managers the opportunity to cut the costs necessary to maintain earnings. Tell me Jon, how were the revenues for the companies you refer to. That is the real indicator of where the market is going. Any half decent manager will maintain the bottom line by cutting costs. Big deal. But if you look at the BIG PICTURE Jon, you will see that this market cannot be forcast from graphs and what has happened in the past. There are things happening today that have not happened in the past, and so to try to project a bull market based on the past just won't work.
Here are just a few things that you might want to consider when you are giving advice through your rose colored glasses:
– With the only traders left in the market being the large "fast trading" banks and funds, there is no precedent in the past for this situation.
– Record government deficits world wide.
– Environmental disasters in the making.
– A huge surge in radical Islamic followers. These people are not free market thinkers Jon, and if you look at the demographics of this growing Muslim movement, it might just scare the bejeebers out of you.
– A massive movement in geopolitical and financial power to China and away from the USA.
Jeez Jon, why don't you stop trying to pump sunshine up our butts and start giving us some real recommendations as to how to play the current situation.
The Dog is shaking and if your not dug in deeper than an alabama tic you will be thrown off ! information is quickly disseminated around the globe , yes the true values and equities "Look in to my eyes"( mesmer ) has been the decades mantra . Doesn't the world need, a true gauge of value instead of this side show of and carny talk . Their must be a high resolution of clarity . Focus , not hocus-pocus ! Many have espoused the virtue of Gold , in an attempt to seek value or Equity . A natural reaction, when caught by a current is to reach for the solid object. But some times our strength too grip is overwhelmed, thus no matter what, we are swept away with the rest of the debris . Gold and all commodities would seem like a natural reserve of value and in normal tides they would be . But this is a tsunami of insecurity of opaque opportunity of equity unable to enter ! The currency is not the problem in EU or any where else . Therefore , To solve this crisis , One must remove all imputed values and relinquish control to free market and transparency. Tell the printers of money to stop the press. A re-writing of the mark to market is needed, a fine tuning of sovereignty will ensue. faith will be restored . WE must needs avoid a Weimar event at all costs . those most extreme costs would still be inexpensive compared to the lives of so many lost due to world war!
Not enough.Give something More
On June 4 you have written this article. On the very same day the Stocks Exchanges the world over were crashing…
every fundamental is looking very bad
as the famous quote goes " only economists and madmen believe in continous growth"
we are on the edge of the cliff
the next depression will make the 1930's look like a picnic
MOUSETRAP or RANGE BOUND ?
What if we are in a series of rallies but still in a long term bear market since 2007? Notice every time the DOW gets near 11,200 it goes back down (resistence level ?). Maybe the market will be up perhaps 11% by year end, but with such volatility, most individual investors won't necessarily be up by the same amount.
If we are in a real bull market, then over time, we should eventually revisit the market highs of 2007, but right now, nobody expects that to happen. Continuing High Unemployment is a big problem and so is a lack of credit (loans). Banks are so tight they just are not lending the amounts they once were. In addition, most all Federal taxes are scheduled to increase beginning next year.
Right now, it does not quite seem like a new bull market, and each "correction" fools more investors into believing a bottom is being "hammered out", once again. It appears we are range bound, but not sure of the limits of the index "range".
It's not only U.S market, it's global markets now are all down, and hopefully would all bounce back.
The problem is people's fear again, and goverments action are slowly to solve current issues.
Overall whoever can catch the opportunity, who'll get profit.
[…] to see global growth accelerating further. As for the recent stock market decline, I believe it is just a technical correction that was wholly warranted following the bull market that began in …. The uncertainties that we are seeing are short term and should be taking backstage to the […]
[…] Money Morning: Two Big Reasons to Believe the U.S. Stock Market Will Bounce Back […]