This market could run up just as easily as down. If the world economic powerhouses actually kick start thier economies, via budget cuts, lower interest rates (in europe), and various governmental incentives which induce consumer spending, you will see this market break to the upside without a large downside correction. Now, having said that, I don't believe it to be too likely a scenario, but it is quite possible to achieve. For the most part low oil prices are a mixed blessing. I believe higher oil prices would slow our expansion to the point where higher interest rates, by the fed, would not be necessary. Thus, oil isn't so much a factor in the US, up to $18. This would help oil producing nations but hinder economic powerhouses such as euroland and japan. I think low oil prices are going to remain a large contributing factor to continuing the expansion abroad, which is already showing signs of slowing. Thus, europe needs to lower interest rates and Japan needs sell off assets (including T-Bills) and pour that money into the private sector and shore up the holes, before she sinks some other boats with her. The US would take it on the chin from that one though.
So, we'll probably remain in a weak market but, I'm not so sure about the big kahuna sinking. The world is evolving far more rapidly than it was even twenty years ago! More people want better living conditions, and there are more births, longer lives, and quicker turnaround of ideas all leading to bigger economies. |
