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Why Are Worldwide Stock Markets Rising?, Economic Forecasting

By Administrator ~ February 24th, 2015

Hi,

 

The stock markets around the world are rising. The NASDAQ will almost certainly hit all-time highs later this month or next month at the latest. If arnold didn't know better, he would actually believe that we (the world) was booming. Unfortunately (without question) Europe, Australia, Japan and China are all in recessions (or worse). Of the major economic countries, only the United States is not in recession. And the United States' last recession ended in March 2009. That means that it has been six (6) years since the last recession. Generally speaking recessions occur every three to five years. There has only been one case of the United States exceeding seven years between recessions since 1787, so it is safe to say that we should be in recession in the United States sometime before mid-2016. So why are the markets at all-time highs? Maybe because retail sales are falling. No that does not seem likely. Maybe because residential and commercial housing sales are falling. No that does not seem likely either. So, what could it be? Interest rates are rising on the 10 year Treasury from 1.6% to 2.15%, which is a 34% increase. That does not seem like a big deal and it isn't, but that is still not favorable. The dollar is rising making exports more expensive; likely reducing export sales. Hmm. Why are the stock markets at all-time highs? If you are presently in the stock market, you need to answer that question in order to stay in the stock market.

 

It does not seem possible that the markets will continue to rise, but when the markets are at all-time high territory valuations tend to rise ridiculously as valuations tend to drop ridiculously at the bottom. So, we could very well rise to as much as 20000 on the Dow before the market really starts its correction. The higher that the rise goes the lower the bottom will be. arnold believes that before the correction is over (probably in 2016) the low will be about 6000 plus or minus. That would especially be the case if the high is 20000. That would be a 70% drop on the DJIA; which is about average for a bear market.

 

Arnold

 

 

 

 

 

 

 

 

 

 

 

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