There was a time in early March when we called attention to the extreme sense of negativity in the stock market and cited it as one reason to think we were in store for a meaningful rally. That view proved prescient, but as much as we were struck by the level of negativity then, we are now struck by the level of optimism now.
We concur with the view that the economic data, and earnings news, have signaled that the economy is in a bottoming process. However, the market is showing a propensity these days to view everything with rose-colored glasses and that perspective often coincides with near-term tops in the market.
The difference of opinion today, versus early March, is that we don't expect there to be a selloff that would match the magnitude of the recent rally. Conditions are better on a number of fronts. Credit spreads have narrowed considerably, commodity prices have risen, companies have regularly beaten too depressed earnings estimates and, as noted above, there is a growing body of economic evidence that suggests the worst of the downturn is behind the market.
in:
http://news.briefing.com/GeneralContent/Investor/Active/ArticlePopup/ArticlePopup.aspx?ArticleId=NS20090501085339PageOne
Ruin-Nation
11 months ago
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