Stock Market: Where Are We Now?

cheongwee, I think the sun is coming out.

Dow + 145 points.

Stocks gained, erasing the MSCI All- Country World Index’s 2011 loss, while the euro rose and Treasuries tumbled amid speculation Europe will take action to prevent a Greek default. Commodities surged the most this month.

mr cheongwee: Tomorrow will be a green day for SG.


“We may be solving the near-term liquidity issue, but in relation to longer-term solvency, there’s still a lot of implementation risks around what they’re voting on,” Jonathan Garner , the Hong Kong-based chief Asian and emerging-market equity strategist at Morgan Stanley, said in a Bloomberg Television interview. “We do think that the Greek vote is going to go through, so on balance we’re getting more constructive from here, having been bearish on the market up to now.”

I agree......Sentiment is picking up!
Europe indices are +1.1-1.3%



Greek lawmakers passed an austerity bill that qualified the country for a financial backstop it needs to avoid defaulting on its debt. A default by Greece would shock global markets and freeze lending to other heavily indebted European countries.
Companies that benefit from growth in global infrastructure rose on the news that a widespread European debt crisis appeared less likely. United States Steel Corp. rose 4 percent. AK Steel Holding Corp. rose 3 percent.

US stocks end trading higher for third straight day
Stocks closed higher for the third day in a row Wednesday after Greece cleared a hurdle toward getting more emergency loans. Financial stocks rose after Bank of America reached a settlement with investors over failed mortgage securities.
Greek lawmakers passed an austerity bill that brought the country closer to getting a financial backstop it needs to avoid defaulting on its debt. A default by Greece would shock global markets and freeze lending to other heavily indebted European countries.

Citi equity strategists remain positive. Collectively we forecast double-digit gains for equity markets in 2H 2011. The recent pull-back provides a buying opportunity. Despite a slowdown, we expect the economic and earnings recovery to be sustained.
Emerging Markets — We expect EM to outperform DM in 2H 2011. Strong gains should be supported by premium GDP growth, a structurally weaker dollar, solid earnings momentum, and low valuations. The tightening cycle should be nearing an end. Within EM, we favour Asia over LatAm.

If I am allowed to indulge in gazing at the crystal ball. This is how I think the market might pans out. Market will rally for 1 or 2 more days as the Greece feel good effects lingers, afterwhich investors will realize that there are still 2-3 speed bumps before market can really take off. 1 week of slightly more of range bound trading then as we approach mid-July the danger of debt ceiling not raise will generate fears again and maybe the rating agency will then give a wake up slap to the republicans by downgrading the us credit rating and cause 1 more correction to the 3000 flat area. US stocks markets will fall even worse than Asian markets and hoping that will make the republicans feel the pain of money evaporating. They will then kick the can further down the road but either lifting the debt limit temporary or choose a face - saving super down siZed agreement to exit and raise the limit. Then with the debt limit out of the pic and the earning season kicking in, stocks will rebound again, this time round stronger than what we have now. The second speed bump is actually the poor manufacturing data that I expect the US to announce, due Tk the residue effects of japan supply disruption. After which it should not be that much of a nuisance and allow august to be a month of better rebound. This is what I will feel will pan out. However, if the debt limit is raise earlier with a significant budget deficit reduction plan. Then ho say lei.. The market will not correct at all and the rebound will be building on what is happening now and 3300 might be breach. However again, if the debt ceiling does not get lift. Well done! Prepare for knee jerk reaction for the short run and possiblilly long term bear out in the prowl. Hoping for the second scenario and believe the first will pan out. Hope scenario 3 will not happen but if it does, then I think I can licking my wounds.