Wall Street is struggling with panic, but Dow Jones Industrial strives to record highs

Bulls will help S & P 500 and DJIA at the time of the assault of the new stronghold for the Rally

In brief: Nasdaq Composite, Standard & Poor's 500 and the DJIA will try to play back the loss of the week.

Dow Jones Industrial Average is preparing bears an unpleasant surprise. S & P 500 and DJIA will fight for 1,5 – 2% growth against a background of positive statistics and the successful conclusion of Asian trading on the stock market. At the same time, yesterday, the markets sentiment prevailed close to panic: European stock indices lost by 2-3%, Wall Street opened in a minus 2%, oil prices dropped more than $ 2 per barrel.

In fact, you can talk about changing expectations: if the spring market participants believed that the world economy will recover better than expected, it is now – against the backdrop of weakness in Europe – it is believed that growth could fall. But the actual changes little. We have said that growth in China volnoobrazen, but in general there is no threat. In the U.S., over the past 2-3 weeks has published a number of weak data from the real estate market and the labor market. But it would be surprising if the housing market is recovering without a pause, especially since the United States to discontinue the program of preferential taxation. The same goes with the job market: last month strongly affected seasonal factor, is now expected to report for June (to be published today) statistics show that employment has declined. But overall the trend remains positive. As a result, we can say simply: expectations were too high.

Yesterday, greatly increased the euro – the euro / dollar, “skyrocketed” by nearly 250 points, this is a very significant increase, while the rally was not due to intervention (for example, the Bank of Switzerland), as explained by speculation in anticipation of the publication of statistics on the labor market in USA. On the mood of investors is not affected even record Fitch, in which the agency warned of the risks of the euro area, but said a confident reconstruction of the world economy. Perhaps the current mood in the markets can change only in case of good corporate results (in the U.S. and Europe “season” starts on July 12). If the results are at or better than expected, the shares look cheap, based on the target P / E. Today it is not excluded a small rebound, given the strong recovery Wall Street before closing, but: 1) Goldman Sachs analyst lowered the forecast of GDP growth in China and 2) the U.S. markets will be closed Monday in observance of Independence Day.

Ukrainian Globalist
2010-07-02 13:52, Economics.

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