Good morning

This morning I had cappuccino at the coffee bar near my house. After the waitress had prepared the cappuccino, she wrote "good morning" ("buon giorno" in Italian language) on top of it.  There was a small Italian flag painted on the cup handle.  I thought people who love their job are always kind. One week ago she made another decoretion while she was making cappuccino and coffee cups.

The picture below shows a mural that I saw while I was walking along an alley in the older part of the town. It's easy to see it was painted recently, as the woman in the mural wears a masks :-)

With regards to the mask just above mentioned (and social distancing rules), I am sorry to hear that while many people inoculated with both doses are reporting symptoms of Covid-19, scientists in South Africa have just warned of a new strain of Covid-19 ... Just in time for 2022. EU and UK say they have restricted travels from the South African region to their countries. On the one hand, the effects on the economy of the new detected variant may be devastating, because of its multiple mutations. On the other hand, today "Moderna Inc." share price is rising by 22.45% ... 😦

God Bless the South African people. 

“We’re not out of the woods”

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.

Panic selling

Most people say that stock market has reached bottom. Although it has seen a strong rally since the March 9th lows, it is still in an overall bear market trend. So we can forecast that the market, after a small decline (I hope without panic selling), can move higher. Therefore, the Standard & Poor's 500 Index, which consists of 500 stocks chosen for market size, liquidity, and industry group representation, will slightly try to incease its volume surge. The Standard & Poor's 500 resistence level of 935 - 945 would may mean a rise at 1045.

We can all have the same information about the world stock markets, but people act differently on the same information. Anyhow, it isn't easy to distinguish something that is signaling a real breakout from a new trend.

development of the green economy

Halfway through last year, while the Standard & Poor's 500 Index was falling 10 percent, the green energy shares rose 30 percent. And during the two "panic selling" bottoms of October 2008 and March 2009 all the shares linked to renewable energies climbed easier than the Standard & Poor's 500 Index. In this perspective, most people think that the economic phenomenon called green economy will gradually cause the new speculative bubble of global stock markets (http://personalfinanceandinvesting.com/).

Although some green energy shares are actaully overweight I think that the environmental sector of the global economy will increase. Nowadays United States and Spain are the most important makers of renewable energy in the world. Next year a new big photovoltaic station will be built in Australia (Mildura). Four photovoltaic stations will begin to produce renewable energy in the U.S. Mojave desert in 2011. Moreover, there are important projects about the production of photovoltaic energy in South Afrika (Upington) and Israel (Negev desert).
The UNDP report on green employees shows that the jobs linked to sustainable development and "green economy" in the world are 2,3 million of which 670,000 jobs in photovoltaic sector only. The development of "green economy" may increase the employment because it needs technicians, installation firms and designers. Of consequence, the growth of employment, which improve consumer spending, may give strenght to the global economy.
In the U.S. stock market there is one of the most important company which makes photovoltaic panels. The name is First Solar and since May 2008 its share price have fallen from $ 317 to $ 130. General Electric and the Danish company Vestas are the world leaders of the wind turbine. In the end, in the green business of stock market there's the Swedish company Abb.

Nasdaq index will probably rise next weeks

After the double bottom in October 2008 and November 2009 charts show that Nasdaq index will rise next weeks. Although experts don’t see a trend changing we can analyse others interesting signals in the stock market. Nasdaq index begans to rise, comodities prices have grown and stock markets of emerging economies have revitalizes. Under this perspective, the resistance level of 2050 of the Nasdaq index would may mean a changing trend in the global financial markets. In the past others stock market indexes like S&P 500 and Dow Jones Industrial followed the Nasdaq index growth.

A lot of economists think that a strong increase in the global financial markets would cause a problem concerning inflaction control. The fluctuations of stock markets, that always anticipate all financial phenomenons, will probably give a danger signal linked to growth of the global inflaction.