On 16 December 2008, Dow Jones Industrial Index, DJI although encountering countless bad news and people talking about recessions is not contemplating to fall as it rose 102.99 points or 1,2 percent. Despite analyst everywhere calling for caution trading and beware of correction after the recent run-ups, investors are buying.
My take on the market is that it is really time to buy as the market usually react way before things happen. Before recessions, stocks are seen really battered down which caught many by surprise and that is how stock markets all around the world works. Investors have more reason to get upbeat again in additional to the better than expected loss report by Goldman Sach which implies banking and financial are recovering slowly.
But the real news that moved the market would most probably be the anticipation of Federal Reserves interest rate decision. Well, in the long run, for the sake of economic viability, rate cut is believed to be the key to spur spending by consumers. This rate cut is anticipated by investors and market watchers all over the world to bring the interest rate of Greenback to the all-time lowest level ever.
This really shows how the US government are committed to combat recession and preventing it to deteriorate further.
FTSE closed decently positive and Asian markets are likely to follow suit with taking direction from Wall Street’s closing.
The above are of personal opinion and not at all an inducement to trade.