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Is there a safe bet in the market?
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According to many analysts, Bernanke’s testimony gave a safe bet for investors for this week.Of course the expectations mostly based on coming moderate consumer prices.
However is there a chance that Bernanke is mistaken? Even though he is mistaken we won’t see the effects possibly until March. Mergers and acquisitions still can give stock market a boost however I still believe Fed will need to raise the interest rates.The inflation is still above the comfort zone.If I were Fed chairman , I would increase the rates on 20-21 March meeting.I believe it is more costly not to raise them in order to satisfy coming power: Democrats.However I am not Fed chairman.
My forecast calls for a 2.0 percent increase in the overall CPI and a 2.6 percent gain in core CPI.
With the pace of corporate earnings reports slowing, Wall Street will have its eye on consumer prices and other economic indicators in this holiday-shortened week.
The U.S. stock market will be closed on Monday for the Presidents Day holiday.
On Tuesday, trading will resume and earnings from Dow components Wal-Mart Stores Inc.) will be among those getting scrutiny from U.S. stock investors.
Wal-Mart, the world's biggest retailer, will report earnings for its fiscal fourth quarter, which ended in January. The company has already said that sales at stores open at least a year rose in December and January after a small decline in November.
Home improvement retailer Home Depot, grappling with a number of strategic issues, may not set the tone for the rest of the market. But Home Depot and its rival Lowe's Cos. (which will report this coming Friday, will likely be studied for an indication of the impact of the housing slowdown. This is especially true after Friday's data showing a plunge in U.S. housing starts in January to a 10-year low.
I believe the only thing can pust stock market forward is mergers and consolidations.
Although mergers typically come by surprise, a "wild card" for Wall Street. Activity has been running at a furious pace, with data firm Dealogic reporting 3,235 global deals this year through Feb. 15. The dollar volume of those deals -- at $482.2 billion -- is up 28 percent from the same period in 2006.
The big question for Wall Street is whether the U.S. stock market will consolidate recent gains, or whether it is vulnerable to profit-taking.
The cushion of cash that sits in the marketplace still provides a reasonable support point for the market. But I think we're going to bounce against that cushion of cash unless we have some big merger announcements. |
| Tarih
: 20.02.2007 |
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Copyright
© 2006 Mert TOKER All Rights Reserved. |
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