Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Global Stocks Bull Market Gathering Steam

Stock-Markets / Stock Markets 2010 Mar 17, 2010 - 04:11 AM GMT

By: Puru_Saxena

Stock-Markets The ongoing bull-market in global stocks is gathering steam and over the past few days, the momentum has shifted in favour of the West.  Yesterday, the S&P500 Index closed at a 17-month high and we expect further gains over the following weeks.  Over in Asia, our preferred markets are performing well, with India leading the way.  Furthermore, it seems to us as though China and Vietnam are also about to commence another upleg within their primary uptrends.  Given the fact that the Asian economies are in a much better shape than the West, we continue to believe that stocks in India, China and Vietnam will produce solid growth over the course of this business cycle.  Therefore, we are holding on to our positions and believe that near-term weakness represents a buying opportunity.


As far as the technical picture goes, it is notable that the market's breadth is extremely strong and the Advance/Decline line on the NYSE has broken out to a new high.  Furthermore, the number of new highs is significantly greater than the number of new lows, the bank index has started outperforming the broad market, volatility has subsided and the yield curve is very steep.  All these are positive signs and suggest that we are still in the early stages of the ongoing bull-market.  Remember, interest-rates are very low in most nations and the monetary backdrop is supportive for asset prices.  As long as the interest-rate environment is favourable, we will maintain our growth seeking investment positions.

Over in the commodities complex, the price of crude oil is trading above US$82 per barrel.  This is in line with our expectation and as long as the economic recovery is intact, we should see more upside.  Regardless of what you might hear in the mainstream media, hard data confirms that the world will struggle to produce more than 89 million barrels per day of crude oil and with demand rising in the developing world, the stage is set for a serious oil crunch.  Our view remains that the price of crude will rise significantly and we have allocated roughly 35% of our clients' capital to superb energy companies.  Apart from upstream oil companies, we have stakes in world-class solar, wind and power companies.  Moreover, we have recently acquired a stake in a railway company which should be a prime beneficiary in an era where trucks will prove to be big losers. 

In the metals arena, base metals are holding steady and this is despite the big build up in inventories.  In our view, this rally is mainly due to speculation via 'long only' commodity trackers and at some point, we will get a nasty correction.  Accordingly, we have recently liquidated our positions in the base metals miners and have allocated capital elsewhere.  With so many opportunities around, we do not see the point in making a speculative bet when the supply/demand fundamentals do not support base metals. 

As far as precious metals are concerned, gold and silver are trying to build a base.  It is worth noting that precious metals are in the seasonally strong time of the year and a spring rally is still possible.  As George Soros stated in Davos, "with near-zero interest-rates, gold is the ultimate asset bubble".  We agree with his assessment and believe that monetary inflation together with the massive debt overhang in the West will propel gold and silver to new highs.  Accordingly, we are holding on to our positions in our preferred gold and silver mining stocks.

In the world of money, the US Dollar Index is trading in a tight range and it is struggling to break above the 81 level.  Furthermore, the Euro and the British Pound are now extremely oversold, so a sharp rally cannot be ruled out.  Amongst the paper currencies of the developed world, we prefer the Canadian, Singaporean and Australian Dollars.  And in the developing nations, we like the Indian Rupee and the Chinese Yuan.

The above ‘Weekly Update’ was sent out to subscribers of Money Matters on Friday, 12 March 2010.

Puru Saxena publishes Money Matters, a monthly economic report, which highlights extraordinary investment opportunities in all major markets.  In addition to the monthly report, subscribers also receive “Weekly Updates” covering the recent market action. Money Matters is available by subscription from www.purusaxena.com

Puru Saxena

Website – www.purusaxena.com

Puru Saxena is the founder of Puru Saxena Wealth Management, his Hong Kong based firm which manages investment portfolios for individuals and corporate clients.  He is a highly showcased investment manager and a regular guest on CNN, BBC World, CNBC, Bloomberg, NDTV and various radio programs.

Copyright © 2005-2010 Puru Saxena Limited.  All rights reserved.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in