As a Discounting Mechanism, the Market Will Rebound Before the Economy - Seeking Alpha
Markets are efficient in a sense that all the known news and forecasts are already calculated in the market price.
It has already been said that markets are moved by sentiment and tremendously affected by expectations. Noone can say with absolute certainty if or when there is going to be a ground-breaking event in the future, like new war or a sudden increase in demand of any commodity, service, or currency. But all the known facts (and distortions) are calculated into the current market price.
So, markets may not further when there is only doom and gloom in the news. All the foreseen doom and gloom is already there - in the market price. So, as things go for worse or are expected to go for worse, the market price will fall. Likewise, as things improve or are expected to improve, the market price will rise.
The above article also mentions that Nouriel Roubini also thinks the recession would end before the end of 2009.
My thoughts is that the market has to stabilize for some time (Stage 1 as shown here), before it can start another growth stage (Stage 2).
Markets are efficient in a sense that all the known news and forecasts are already calculated in the market price.
It has already been said that markets are moved by sentiment and tremendously affected by expectations. Noone can say with absolute certainty if or when there is going to be a ground-breaking event in the future, like new war or a sudden increase in demand of any commodity, service, or currency. But all the known facts (and distortions) are calculated into the current market price.
So, markets may not further when there is only doom and gloom in the news. All the foreseen doom and gloom is already there - in the market price. So, as things go for worse or are expected to go for worse, the market price will fall. Likewise, as things improve or are expected to improve, the market price will rise.
The above article also mentions that Nouriel Roubini also thinks the recession would end before the end of 2009.
My thoughts is that the market has to stabilize for some time (Stage 1 as shown here), before it can start another growth stage (Stage 2).
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