I am scheduled to appear on Asian Market Watch tonight between 8pm and 8:30 EST.Here is a list of topics that might come up;
- Oil came out of the blocks strongly in 2006 and there was nothing from the OPEC meeting in Vienna to convince the market that things would be very different anytime soon. The idea that energy can go down a lot from here and stay down does not make sense to me. Supply and demand are close to even right now. Demand is growing faster than supply. This means higher oil prices than what is considered normal. That does not mean that oil can go back into the $50's and stay there for a while. This will continue to mean very good things for energy companies.
- The big story on Tuesday centered around Alan Greenspan's last hurrah. I am concerned with how complacent the market seems to be about getting a new Fed chairman. Chairman Bernanke is more of an academic. There will be differences between Bernanke and Greenspan in terms of communication and perhaps methodology. I expect an adjustment period with a little more volatility for stocks, bonds and the dollar.
- While I think the Fed should have stopped raising rates a while ago, I expect another hike in March.
- The State of the Union speech is not very likely to have a huge impact on trading (unless he comes across as strong on keeping the dividend and cap gains tax cuts in place) on Wednesday but it seems Bush's popularity numbers tend to go down after these speeches. This could contribute to eroding sentiment over the next few days.
- What might have a bigger impact on Wednesday trade is the reaction to the Google earnings report. At last glance the stock was down $55 per share in after hours trade. The market may take a big chunk of that back before the open on Wednesday but if not, the report stands to cast a pall over the entire market.
3 comments:
Roger, I would surmise you would recommend a over-weight owning of Asian and European funds at this time based on your comments? In the past {last week} you only liked 6 or 7% in foreign markets. That doesn't seem to be your thoughts now?? Is 30% in Foreign to include a split between Latin America, Europe and emerging Markets of Asia now sound right??
Oh dear, I am one of those who have access to Asian market watch and I have to miss it.
I think the Fed has to continue a couple more rate hikes to guard against inflation. Because when the slack in resource utilization is removed, increased in core prices feed more directly to the consumer.
Interestingly Clinton's popularity shot up after his SOTUA.
Clients are about 34% exposed to foreign. Included in that 34% is 6%-7% in emerging. So a client with $1000 would have a total $340 in Foreign.
$70 in emerging
Plus $270 in developed
Sum $340
This is a generalization of numbers. Any specific client could be more or less.
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