Dow Jones 10,000: What’s Next?

In Financials on October 15, 2009 at 23:27

le_floor_de_Wall_streetWednesday, 14th of October: the Dow jones industrial index surged above the psychological limit of 10,000 points for the first time in over a year. What triggered the cross-over was the announcement of Intel’s Q3 earnings which topped estimates and signalled an upcoming positive momentum for the tech industry. Growth was really strong from the Chinese market for Intel’s sales, an indicator that could justify a slow “shy” recovery in world trade.

The big question here is whether or not the 10,ooo points level can be justifiable according the current market fundamentals and the future prospects of the American economy. There is a lot of progress that has been made in the markets and we have definitely avoided the worst, but uncertainty is still around and lending is still at past levels. Eminent Turkish economist, Nouriel Roubini, sees a double-deep recession and we have yet to see the second part of it. I will have to adopt his view as I still think there is some major correction that needs to take place in the markets before we can talk of a steady road to recovery. Let’s not forget that the total loss in the financial industry is still unfolding and trillions of dollars have just vanished. It would simply look a utopia to actually believe that markets can continue in such a unstoppable momentum. So hold your horses there people because the road to recovery is not gonna be flat..

by the Self-Seeker


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