By Prensa Latina,
London : In the midst of despair, a bull market, described The Financial Times today the situation in the major markets after Barack Obama´s election victory for the US Presidency.
Almost all of the major stock markets have already bounced by more than 20% in the past few days, says online economic news service Money Morning.
The rally could of course last for longer. And the fact that we have had a very decisive vote in the US election will help – markets hate uncertainty, and at least some of that has gone now.
So have markets finally seen the bottom? Well, no, affirms Money Morning. As Financial Times says, all this means that “the standard definition of a bull market is distinctly lacking.”
Stocks are bouncing back from an incredibly steep fall. Looking at technical indicators such as the 50-day moving average, the Financial Times points out that the long-running trend is still very much pointing down.
Obama is facing the toughest economic conditions any new president has seen, arguably since the Depression. As Edward Hadas puts it on BreakingViews.com, “the whole financial system is basically kaput.” Without “trillions of dollars” of government backing, “the whole banking system would likely be out of operation.”
“A big trade deficit and large international liabilities make the dollar vulnerable to a run. The country may get away with low overnight interest rates and a $1 trillion federal deficit for a while, but steering policy will be like walking next to a cliff in the fog,” comments Hadas.
Analysts see a lot of pitfalls ahead and lower lows in the markets next year, ends Money Morning.