Concerns about a slowing economy continued to cast investors into the sidelines.
Minutes of the FOMC meeting revealed that the FED thinks a
gradual recovery won’t occur until year-end. Many of the FED
members saw some risk of excessively low inflation for a
protracted period and a few even warned of deflation.
If the stock market typically moves 6 months ahead of the
economy and assuming a recovery by year-end earliest, which is
what our economist seems to believe as well, this will coincide
with our view for the STI to drift down first before bottoming
out somewhere in 2Q.
20th February 2009
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