Monday, December 24, 2012

Stock Market: Merry Christmas

Today the US stock market closed in the red. The holiday sentiment got spoiled by Washington DC´s apparent inability to find a timely solution for the fiscal cliff problem.

I reckon that the stock market will recover soon. In spite of all the problems the US market, represented by the S&P 500, gained 13% year to date. I reckon that in 2013 stock prices will proceed marching north.

I have the strong belief that the politicians have no other choice than find a compromise, even in the last minute. But there are more reasons to be optimistic. The US consumer spending, the engine of the global economy, is still strong. Last week we got news that the American consumer spending rose in November by 0.4%, fueled by solid income gains ( And there is another growth engine: China & other emerging markets. It seems that the middle kingdom managed her soft landing this autumn and is accelerating again. I believe that US consumer spending and the growth of the emerging markets will continue to fuel the global recovery next year.

Bloomberg also reports that the masses missed the stock market rally which started in spring 2009 (bloomberg). The majority of the Americans is now sitting on high piles of cash with almost no revenue. I guess that the ongoing global recovery will heal the sentiment and the masses will have to return to the stock market and will fuel the forthcoming rally.

Happy Christmas to everyone.

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