So its the Bulls vs the Bears again. For the bullish, these guys are buying commodities , gold, and oil related stocks. For the Bears, well, I think they are just sitting there and saying to themselves that 'We will watch and see how it reacts after all, the markets always come back within 2 weeks or so".
I will not be catching falling knives too soon as yet and it does not make sense to be holding a position over the weekend.
Chinese stocks are the most pricey currently trading in the above 40 PEs, with HK China shares following and one can expect further 'weakness' there with some selling expected on that area although, the wealth and liquidity of chinese funds cannot be discounted.
Are investors in self-denial of the fundamentals. Just think , higher oil prices = more pricey products. Cost of living has to go up as its now more expensive to transport supplies and goods now. Subprime problems in US mean loss of jobs and borrowers may have to find ways to pay off their housing loans, which means that they will have to cut their other expenditures and the continued announcement of job losses at banks on the mortgage departments will mean that there is a bunch of people out there looking for jobs. Its a definite slowdown expected next year .
Personally, I like a newsclip article on Wednesday with Gisele Bundchen saying that she will accept all currencies except the USD as payment for modelling jobs. It just says it but somehow, US /Fed in a Hobson's choice of just keeps cutting rates which means US$ will continue to remain weak
The bad news:
Oil recouped early losses to resume its march towards the US$100
The strengthening of the Yen again, may see some unwinding of carry trades, also perceived bad for Japanese stocks as it makes exports more expensive
Jitters have grown since Citigroup Inc said on Sunday that it needed to take an additional US$8 billion to US$11 billion in writedowns. Note that ML had just earlier reported a US$8.4billion loss writedown for 3Q07
General Motors Corp on an accounting adjustment, had a a record loss
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