Hello 2009. What do you have in store for us? Will you finally put the immense problems of the economy behind you? What surprises are you going to spring on us?
Nobody gave me a crystal ball for Christmas. Then again it doesn’t take one to predict a lousy 2009. “More of the same” isn’t much of a prediction, is it? It’s more like a status report projected into the future.
I don’t believe in “more of the same.” Either things will get better or worse. The one thing they won’t do is stay the same. Here are six things I think will happen in ‘09.
1. The BRICs (Brazil, Russia, India and China) will have a terrible year. China will compete with the U.S. on who has the bigger government-led infrastructure program. They will also compete on whose is more effective. China’s will be building roads and schools. In addition to roads and infrastructure projects, President- Elect Obama’s will be building wind mills and broadband networks for schools. Both will fail in creating permanent jobs.
2. Iran will save oil. OPEC’s spotty execution in cutting oil output will not stop oil prices from falling further. But Iran’s refusal to stop its nuclear development program will beget serious sanctions from the West, threatening Iran’s oil exports. Oil prices will hit $20 per barrel and then start rising again.
3. Solar stocks (and other alternative energy companies) will spike after Obama gives his first state of the union address at the end of January or early February. Then, when investors realize that the actual legislation is still months away, prices will slink back to their previous low levels.
4. One of the big three auto makers will disappear. Here’s a hint: It won’t be Ford. It will, however, mark the beginning of the auto industry’s recovery.
5. The fourth quarter will cough up earnings reports that manage to disappoint rock-bottom expectations. The Dow will plunge and flirt with the 5,000 mark. Obama’s big stimulus plans will pick the market up before investors realize how horrible the economy must be for Obama to be spending another $1 trillion trying to revive it.
6. Americans fall in love with big cars again.
It’s going to be an interesting year.
Happy New Year,
Andrew Gordon
Posted 30Dec2008
extract in stockmarketwatch.info
Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell
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