It isn't a matter of pessimism or optimism. The 5th of May 2009 I posted something about the rise of the Nasdaq index which generally indicates the major trend in the global stock market. Actually, during the last two months the world's stock market grew more than forecast. For example, the Standard & Poor's 500 index rose by 40 per cent since the March 9th lows and a Goldman Sachs report shows that it, which reached last week the level of 940, won't increase within next six months. Although, China and other emerging nations didn't increase their demand of raw materials, we saw the growth of price commodities as crude oil $ 69 and copper $ 230. We need to understand the behaviour of investors considering the decrease of world's consumer goods and the growth of unemployment rate. U.S. payrolls fell by 345,000 in May, less than forecast, while the unemployment rate hit a 25-year high of 9.4 percent. Meanwhile, here in Europe, Irish unemployment reached 11,8 percent.
In this perspective, actual rise of prices is probably related to an irrational behaviour of investors, who think that stock market has reached the bottom. Next month we will likely see the beginning of the summer drop (traders sometimes say "sell in may and go away"). As soon as the slight decrease of stock markets is remarkable investors will see good shares to buy of course. In my opinion the overall trend since March 9th lows should be up to sideways. We will see a horizontal trend with a result of the prices traveling between strong levels of support and resistance. Most experts said that the latest rally may be a “trader’s rally” instead of a bull market. They added “We still have more problems to be worked out.”
The photo above posted shows the delivery of new cars in Civitavechia's harbour.
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Thanks for checking out my blog.
Was actually in Rome in April for a week after running the Paris Marathon in France. Had a great time in Italy.
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