Tuesday, January 15, 2008

US Markets Recover After Recent SellOff

On Monday, US markets staged a rally after a strong earnings display by IBM and recovery in technology sector stocks along with soft crude oil prices. This was expected as correction in that market was swift and sharp. However, to conclude that worse ic over for US equity is a illusion. There are still fundamental problems with US economy and one can't wish them away in a hurry. Also, US fed is expected to cut rates by atleast 75 basis points and if that doesn't come, then that market can see a sharp selloff. However, fed will increased pressure to cut rates by steep amounts in order to bring back normalcy in troubled credit markets and banking system. Asian stocks have also shown volatility with slight negative bias. This is obvious as investors are still wary about US economy, high inflation across assets along with high food and energy prices. Volatility will be the name of the game for some time to come.