Battered US stocks enter the New Year next week on expectations of a gradual market recovery as US president-elect Barack Obama moves to drag the world’s biggest economy out of recession.
The US stock market has risen about 20 percent from its climactic lows reached on Nov. 21 and “chances that we saw the bottom of the bear have increased because of the massive easing done by the Federal Reserve since then,” said Alfred Goldman, chief market strategist at Wachovia Securities.
The Fed had vowed to do whatever it takes to help the economy and the credit markets, as it slashed interest rates to virtually zero two weeks ago to jumpstart the economy from the worst slump since the Great Depression.
Goldman said stock valuation levels were “very attractive” and “the risk of a depression is extremely unlikely,” forecasting the recession may end next summer.
“We do know that 2009 will bring a new slate of ideas from a very popular president-elect,” he said ahead of Obama’s inauguration on Jan. 20 and the prospect of a massive stimulus package by his new administration.
Amid the current gloom of job and spending cuts as well as a credit squeeze, “the seeds are being sown for a modest recovery that we are forecasting to begin in mid-2009,” said Stephen Auth of Federated Investors.
“The prospect for eventual better times has led us to raise slightly the risk profile of our model stock-bond portfolio to capitalize on opportunities that arise in the months after the economy bottoms,” he said.
In the week to Friday, the Dow Jones Industrial Average, Wall Street’s benchmark index, fell 0.74 percent to 8,515.55 following a 0.59 percent drop the previous week.
The tech-studded NASDAQ shed 2.17 percent to 1,530.24 while the broad-market Standard and Poor’s 500 was down 1.69 percent to 872.80.
The stock decline stemmed from weak data on the ailing housing sector, and concerns over the fate of struggling automakers as well as plunging corporate earnings and retail sales as well as deteriorating US commercial property values.
“The underpinnings of the markets continue to improve, but it is still too early to say that the worst is finally over,” said Paul Nolte, director of investments at Hinsdale Associates.
“Our best guess at this point is that we rally a bit early in the New Year as investors wish 2008 good riddance,” he said.
However, he cautioned that once the likelihood of a still weak economy persisted into the second quarter, the market could visit old lows during the first half to eight months of the year.
“We are expecting that the second half of the year is not only good for the market ... and the economy should also begin to improve,” he said. The bond market, which had greatly benefited from the financial and economic uncertainty, fell the past week.
The 10-year Treasury bond yield rose to 2.137 percent from 2.131 percent the previous week and that on the 30-year Treasury bond was up to 2.613 percent from 2.562 percent.
Bond yields and prices move in opposite directions.
A signaling system malfunction disrupted high-speed rail (HSR) services beginning at 8am today, with trains temporarily reduced to three northbound and three southbound trains per hour as authorities conduct inspections. The malfunction occurred on a section of track in Miaoli County during pre-operation checks early this morning, forcing northbound and southbound trains to use a single track, the HSR operator said. The regular schedule has been replaced with three hourly trains offering only nonreserved seating in each direction, stopping at every station, it said, adding that business class cars would still have reserved seating. Departures from terminal stations are scheduled at the top
Taiwan is still in the process of assessing the possibility of recruiting workers from Eswatini, the Ministry of Foreign Affairs said yesterday, adding that its goal is to help Eswatini upgrade its vocational training centers. If there are plans to recruit workers from Eswatini, safeguarding national security, protecting public health and ensuring the employment rights of Taiwanese would be prerequisites, Department of West Asian and African Affairs Director-General Yen Chia-liang (顏嘉良) told a news conference. Key considerations would also include filling labor shortages in specific industries, and fostering bilateral professional and technical exchanges, he said. Yen was asked about the progress of labor
A US uncrewed surface vessel (USV) encountered multiple Chinese warships during an autonomous transit of the Taiwan Strait, US defense company Seasats said in a statement on Wednesday. Seasats announced that a Lightfish USV had completed the first autonomous transit of the Taiwan Strait. Over five days, the USV traversed the entire length of the Strait while constantly monitoring surface vessel traffic, the company said. The Lightfish encountered multiple Chinese warships, one of which was a Chinese People’s Liberation Army Navy (PLAN) Type 056 corvette, it said. The Chinese vessels were operating “well within Taiwan’s exclusive economic zone without transmitting their identity via the
VERBOSE VESSELS: A CGA cutter and a China Coast Guard exchanged verbal barbs for more than a day in Taiwanese-controlled waters before the Chinese vessel left The Taiwanese and Chinese coast guards had a standoff near the strategically located Pratas Islands (Dongsha Islands, 東沙群島) in the north of the South China Sea, the Coast Guard Administration (CGA) said yesterday. The two sides engaged in intense radio exchanges over sovereignty claims during the 33-hour standoff. China Coast Guard vessel 3501 eventually left the restricted waters, 26.6 nautical miles (49.2km) west of the Pratas Islands, at 5pm yesterday, the CGA said. Lying approximately between southern Taiwan and Hong Kong, the Taiwan-controlled Pratas are seen by some security experts as vulnerable to Chinese attack due to their distance — more than
RSS