Monday, April 9, 2012

Market Gloom = Further Gains Ahead?

It is an old Wall Street expression that bull markets "climb a wall of worry"; that is, markets often rise when pessimism is rampant.

If that's the case, then perhaps we're in for an explosive second quarter rally, judging at least from what is being written in the financial press.

Here's just a sample of a few of the articles have been published over the last couple of days:

Headlines from this morning's Wall Street Journal:

Wake-Up Call for U.S. Stocks

Lackluster Profits For First Quarter May Rattle Shares

From yesterday's special "Mutual Funds Report" section in the New York Times:

Wary of Heights (and the Future) 

SEEING is supposed to be believing, but a second consecutive quarter of eye-popping gains for stocks has left many investors still unconvinced that the long-term trend is up.

The Standard & Poor’s 500-stock index rose 12 percent in the first quarter, after gaining 11.2 percent in the one before, yet the panic that was palpable last fall seems to have given way to doubt, more than to euphoria or even hope.

From yesterday's Financial Times: 

Investors braced for fall in US profits

Time To Panic About Europe Again 

“This is the Rodney Dangerfield of bull markets,” said Ed Yardeni, president of Yardeni Research. “It doesn’t get any respect. The naysayers have been badmouthing it really since the start.” 

Skeptical investment advisers find much to say nay about; they question that a bona fide recovery is in place or that the last disruptive piece of news has come out of Europe. 

Others, including Mr. Yardeni, are skeptical about the skepticism. “There have been numerous nearly apocalyptic scenarios out there that haven’t played out,” he said. “Despite the scares we’ve had, the global economy continues to grow. The adage about the market climbing a wall of worry has never been more relevant.” 

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