What are your views on the market/US economy for the rest of 2011?
US indices are now approx. 12% away from its all time highs. Who would have predicted that less than 2 years ago (more precisely March 2009) when the indices dropped 60%. More than half of the value of the nation wiped out. Just goes to show you that when the monetary policy is extremely accomodative and inflation is low, risky assets benefit big time. The surge in the stock market also shows how the domestic unemployment rate is becoming less relevant in a globalized world. Half of the revenues of the companies in the S&P index come from abroad, so there could be a disconnect between corporate profits and employment for a prolonged period.
I’m expecting things to go relatively sideways with modest increases in global indicies
Anyone got any good strategies for a day trader to make some coin in this market?
S&P is now up 100% since the March 2009 lows. Nasdaq up 123% and the lagging Dow 90%.
markets are going to die in the fall.
I’m long hard dollars, low leverage hard asset balance sheets, value providers/distribution channel components for commodities, defensive stocks i.e staples, and select financials… I will pick up some muni bond exposure fairly soon also. I see a market correction of around 8-10% in the next few months when we see the end of QE2 coming, similar to last year with the end of QE1 but this time we need to practice some restraint and austerity and let the markets correct to efficiency. All bloomie users, have you gotten your magazine this month? If so the article on Iceland was excellent; although comparing us to Iceland is apples to oranges, they are a good microcosm example of our economy in my opinion; due to the heavy economic reliance and contribution of their banking system. Only difference was they let the banks fail.
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As long as the Fed gives free money to the banks, dont expect a fall. QE3 anybody?
The S&P doubled in 500 days, the fastest run up since 1935. This has been a rally for the ages. Don’t forget to tell your grandchildren (because we probably won’t see it again in our lifetime): low inflation + low rates + strong corporate earnings = stock market on steroids
former trader Wrote: ------------------------------------------------------- > (because we probably won’t see it again in our lifetime): Ummm… Aren’t we seeing a much more fundamental change in how markets are processing information and reacting to that. May be our grand children will see such swings every month or year, aren’t we living in interesting times where markets are starting to decouple from economy, may be we will grow better and break all clutches… shit to economy, we love swings :)!
Why do you feel markets are decoupling from the economy? Shouldn’t they respond prior to fundamental changes in the economy?
Markets are disconnected from the domestic economy. Employment, housing, income and GDP growth are dissapointing . Yet, the market is booming because money is cheap. Growth is elsewhere in the world and corporations who have a global footprint will benefit the most once money gets tight again.
former trader Wrote: ------------------------------------------------------- > The S&P doubled in 500 days, the fastest run up > since 1935. This has been a rally for the ages. > > Don’t forget to tell your grandchildren (because > we probably won’t see it again in our lifetime): > > low inflation + low rates + strong corporate > earnings = stock market on steroids Agreed. The “flight to crap” has been rapid and unprecedented, helped along by such low rates. Some of the valuations we’re seeing these days (especially in tech, I’d say) suggest that there are very few cheap pockets of the market left to go fishing in. JPMorgan just announced a “new media” fund they were launching to capitalize on companies like facebook, twitter, groupon, etc. Historically, when new funds are launching to cater to an investment idea, I think it suggests: -The particular sector the fund will cater to is almost certainly overpriced (or at least, not cheap) -The market in general is probably getting pretty frothy. Since I am at value shop (and consider myself a value investor), and we’re long-term buyers of stocks, I’m rooting for a serious correction so we can put more money to work. On a personal level, though, I pause when I think about how bad the inevitable hit will be when it comes. Emotionally, years like 2008 are certainly not fun. As industry participants, I don’t think any of us enjoy hearing that our friends (or ourselves) are out of work, portfolio values of clients/selves/nation are falling off a cliff, etc. I keep thinking of the Buffett quote, “You pay a high price for a cheery consensus.” The more and more I look around these days, I feel like there’s a whole lotta cheery consensus - prices that require everything to go perfectly for the next 10 or 20 yrs. This attitude seems to be the norm, despite a lack of strong economic data to suggest its warranted. I’m not going to make a general prediction beyond the above; I’d only embarrass myself if I tried to predict a correction with any kind of certainty. All I know is, I’d rather be buying stocks when the mentality is gloom-and-doom.
I’m short monkey skulls.