Can we reject doomsday merchants?
by Peter Switzer
Nope but the battle against the negative, nervous Nellies is starting to look like a more even contest.
The wild and whacky Europeans are still my major concern but we’re seeing a whole lot of good news starting to build up and that’s why stocks are heading north.
Overnight in the USA, Google’s shares dropped 10 per cent in after-hours trading after earnings and revenue disappointed but this company has been over-achieving for so long.
On the other hand, look at these great performances:
- Microsoft beat earnings predictions
- Intel did too
- So did IBM
- And throw in American Express as well!
- Better still, US banks are heading up after a terrible 2011 with Morgan Stanley beating revenue forecasts
- And the VIX or fear index was under 20 overnight, which is a positive sign
- Also the jobless claims report was better than expected in the USA, down 50,000 and now near a four-year low at 352,000 last week
- The S&P index continues to wave goodbye to the resistance level of 1300 as well, which had proved a tough barrier to beat.
The Dow put on 45.03 points or 0.36 per cent to finish at 12,623.98 while the S&P 500 is now at 1314.5, up 6.46 points or 0.49 per cent.
Wait until March
Europe has been showing some good signs with bond auctions doing well and yields or interest rates falling. I think we will have to wait until March before we know if we can trust those pesky Europeans, but things are looking up and that’s why stocks are heading up as well.
There’s a place for negative types but lately they have had more attention than they deserve. I like to consider myself a realist and you know what, history actually shows that we do muddle out of tricky economic and financial disasters. The people who make up mankind are often smarter than the experts give them credit for.
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Published on: Friday, January 20, 2012
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