Daily Investment Interpretations

December 31, 2008

2008-12-31:   The markets rose again today. The NASDAQ added 26.33 (1.7%) to close at 1,577, the Dow expanded 108 (1.25%) to close at 8,776.39 and the S&P 500 tacked on 12.61 about (1.42%) to end the year at 903.25. Oil popped $5.57 a barrel to end 2008 at $44.60 a barrel, and gold gained $14.30 to $864.30 an ounce. The VIX fell 1.63  to 40.
    The year 2008 saw $6.9 trillion in market wealth evaporation... and this after losses from October, through December, 2007. The S&P 500 is off 38.5% for the year, its worst year since 1937, and 42.3% from its October 17th, 2007, high of 1,565.17. The Dow is down 33.8% for the year, its worst showing since 1931, and 38% from its previous peak. The only reason these numbers aren't worse is the result of the year-end rally
    The markets are basically in a trading range, rising slightly over the past week or two. They're also settling down, with smaller excursions in price.
    This article, Street looks to '09 with relief after terrible '08, includes these quotations,
"In addition, some analysts believe the market will improve because so many investors have pulled out, leaving little room for more selling.

"'Given the nasty carnage how much further risk is there?' said David Darst, chief investment strategist for Morgan Stanley's global wealth management group.
"David Kelly, chief market strategist at JPMorgan Funds, said the prospects for the market are 'exceptionally uncertain.'"
"'The great risk is we are in a wait-and-see economy,' Kelly said. 'What Obama needs to do is turn this into a do-it-now economy, give people a reason to buy.'"
    Another article, Uncertainty for 2009, quotes top economist Edward Yardeni saying,
"It will definitely be a great pleasure to bid farewell to 2008. It was a horrible year for just about every investor and every asset class. But we'll only be able to say good riddance to 2008," he added, "if 2009 isn't worse or the same. I'm looking forward to 2009 being a recovery year for the U.S. and global economies. All the enormous stimulus efforts that are being provided by governments around the world should revive global economic growth," he added. "Diversification might actually start to work again."