“In October, all three asset classes — stocks, bonds and commodities such as oil and farm products — were in freefall. Today, stocks are up roughly 20 percent in the past two weeks, the biggest such short-term rally since 1938.”
Biggest short term rally since 1938?
From McClatchy: “WASHINGTON — With the Dow Jones Industrial Average rising around 20 percent over the past few weeks, a down Friday notwithstanding, the question on many lips is whether the stock market has hit bottom and, if so, when might the broader economy follow?
Stock prices often reflect expectations of how the economy will be faring six months or so into the future. If the recent rise in stock prices reflects that the market has bottomed out and is starting a bull run — as some prominent analysts tentatively suggest — that would point to a turnaround for the economy by late summer or early fall.
Few analysts are willing to declare that we’ve hit bottom without hedging, especially since there’s been plenty of premature speculation before about a market bottom during the past 16 months of recession. As if to mock the budding optimism, the Dow closed down Friday by 148.38 points to 7,776.18.
Most analysts now agree, however, that there are some encouraging shafts of light after months of pitch-black news.
“The best news now is that despite the worst . . . daily litany of horrible news, the strongest renewed bank fears, despite all of that, we’ve got stocks today essentially where they were in October,” said James Paulsen, chief investment strategist for Wells Capital Management, owned by the giant bank Wells Fargo.”