Daily Investment Interpretations

December 9, 2008

2008-12-9:  Todd Harrison was right about "turnaround Tuesday". The NASDAQ Composite dwindled by 24.4 points (-1.55%) today to1,547, the Dow shrank 242.85 points (-2.72%) to 8,691, and the S&P shriveled by 21 points (-2.31%) to close at 889. The official reason given for the decline was that corporate outlooks today were disappointing. Oil ended the day up $1.35 at $43.19 a barrel, while gold rose $4.90 an ounce to $774.20. The VIX checked out at 59.
    An article in today's New York Times, Dire Forecast for Global Economy and Trade, summarizes a new World Bank forecast issued today that warns that 2009 will see a global recession, with capital inflows to developing countries dropping by 50%. Also, they don't see any obvious exit from this swamp. The U. S. consumer isn't going to continue to run up debt in order to continue consuming. (Deutsche Bank has generated an even gloomier forecast, with global growth dropping next year.) Meanwhile, Forecaster of the Month: Worst of recession upon us, top forecasters say. These forecasters, Brian Bethune and Nigel Gault, were the most accurate for the month of November. Their forecast from here? They think the December payrolls report will be "another very bad number", although not as bad as it was in November. Looking ahead, they predict that "The shakeout in financial services will take several more months." They mention that construction workers may be able to barter their services, but no one needs the services of an investment banker in exchange for a haircut or a tune-up.
    Michael Ashbaugh, Ashbaugh on the bear-rally case, says the primary trend is firmly down.
    Mark Hulbert writes that Ford Equity's model points to a 'Market bottom by year-end', and that stocks are the most undervalued they've been since 1974.
    Paul Farrell argues that Wall Street is preparing to inflate a new bubble: Ten clues that tell us a new Wall Street bubble is inflating. 
    So what will happen tomorrow? Perhaps the markets will continue marching toward a penetration of the S&P = 1,000 level, as Todd Harrison are suggesting as a target for the "Santa Claus" rally.