Is The Stock Market Rally Fading?
The stock market got quite a jolt this morning as the announcement that TARP will help General Motors (GM) and Chrysler (privately held) with bridge loans. Indeed, at one point the stock market was rallying at around 180 points above yesterday’s close. But not anymore. The Dow Jones Industrial Average (^DJI) is only about 40 points above yesterday’s close, and it appears that the earlier stock market rally may be fading.
Is it profit taking? Is it doubt that the U.S. auto industry help will stimulate in the economy? Is it a combination?
In any case, it is far from certain that the stock market will turn in an up day. We’ve still got four hours to go. But there are some deals to be had — that’s for sure. Even though it didn’t receive TARP help, Ford (F) is heading higher. Ford has a pretty good chance of recovery, and might be a good deal at the current prices. Also, many feel that oil prices might have hit a floor, so the energy sector may see some gains in coming weeks, meaning that the low prices now may be good deals as oil prices and other energy prices start to gain again.
Investing opportunities beyond the stock market
In a stock market — and an economy — like this, there are a number of opportunities to be had when it comes to investing. Bonds remain popular, despite their low yields (you might try municipal instead of federal), because they are a way to preserve principal at this time. Another consideration might be the currency market. The U.S. dollar is expected to gain against the euro as the global economy makes it desirable as a safe haven currency.
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.
