Wall Street Rally Out of the Gate
Image via CrunchBase
Upbeat earnings at Intel have triggered a stock market rally right at open today. Enthusiastic bulls are pushing the Dow, Nasdaq and S&P 500 higher today in early trading. Indeed, the Dow is up more than 140 points, and heading higher, although upward momentum has slowed since the explosive 100 point open.
News that Intel earnings were better than expected, along with predictions that the rest of the year will go well, is providing investors with a reason to celebrate. So far, this earnings season has been largely better than expected, and that is the reason for the optimism seen on Wall Street. There are hopes that this signals that the economy is ready to grow, and that the recession should be coming to an end soon.
Going forward, though, it is important to remember that the financial markets are still volatile. Economic data, though improving, has still been rather lackluster. Without serious improvement in unemployment, housing and consumer spending, there is very little in terms of fundamentals for this stock market rally to build upon. It is also worth noting that stock market recovery is likely to be a bit slow. My Investment Blog offers this insight on the future:
In my opinion - and that’s all this is, just one man’s opinion - we’re about to see a fairly broad based return to growth. Mind you, this won’t be the rapid runaway growth we all might want to see. …
I think this will be a much more subtle period of growth. The coming growth cycle will be weighted down by a global leveling of growth, a regression to the mean growth rate.
This means that it is time to keep your money in the market. Buying now could position you, over the long haul, for better growth and better portfolio performance. For those who invest in index funds, this is a great opportunity. Over a period of 20 - 30 years, you can reap the benefits of overall stock market growth.
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