Stocks losses approached 1 percent off the opening bell on Monday as summer apathy increased, threatening to snuff out the rally of the past three months. A June buyer's strike received more fuel after the World Bank cut its 2009 forecasts for most economies. "We see a very difficult 2009...Unemployment problems are going to continue to linger," said Angel Gurria, the head of the Organization for Economic Cooperation and Development. Read and listen to what the experts had to say...
Worse Stock Correction Coming
“We are going to get a correction worse that what we have seen—quite a bit worse actually,” said Robin Griffiths from Cazenove Capital when taking a technical look at the stock market. “The markets have come up in a V-shape, anticipating the economy will do the same, but the “V” is in the stock market, not the economy,” he said.
Oil, Rates May Stifle Recovery
The price of oil, which is rising too fast, and long-term interest rates that are beginning to creep up are likely to suppress a budding recovery, said Nouriel Roubini of RGE Monitor. He said the recession is going to last through the end of the year for U.S., Europe and Japan and expects a “W-shaped” recovery.
Economy Still in Ill Health
The economy has avoided the worst of the possible outcomes from the credit crisis, but is still not in very good health, said Olivier Blanchard of IMF. “We still have negative growth in the first quarter and we think we’re going to return to zero-growth towards the end of the year,” he said, saying it will take a long time to return to normal growth.
World Bank Sees Most Economies in Deeper Slump
