Stocks advanced on Thursday after a trio of encouraging economic reports: The Philadelphia Federal Reserve's manufacturing report, leading indicators and weekly jobless claims. But tech stocks continued to retreat, pulling the Nasdaq into negative territory while the Dow and S&P ticked higher. Read and listen to what the experts had to say…
‘Months Away’ From a Turnaround
Mitul Kotecha of Calyon Hong Kong said inflation pressures are still “pretty benign.” “Core inflation is at a comfortable level so there’s no concern for the Fed to back away from its quantitative easing policy anytime soon,” said Kotecha. He said the economy has yet to see positive data and that we’re “months away” from a turnaround.
‘Relief Rally’ Won’t Last
The massive government stimulus around the world is the reason for the current rally, according to Matt McCormick from Bahl & Gaynor Investment Counsel. He also said the rally won’t hold, due in part to the rise in interest rates, and the economy will see a ‘W-shaped’ recovery instead.
More Regulation Bad News for Investors?
Increased regulation in the US, UK and EU will be good for the regulators, but will have serious repercussions for investors, said Philip Manduca of ECU Group. “It’s going to be a clear kick-back…from what’s deemed to have been too lax regulation,” Manduca said. “Now they’re going to go and overcook it.”
Financial Reforms Under Fire
The Obama Administration’s regularly reforms for the financial sector may be diluted before coming into effect, said Enzio Von Pfeil of EconomicClock.com. “I’m afraid that the congress will douse [the plans] considerably,” he said. The reforms are not a growth killer but will promote growth if done sensibly and properly, said Von Pfeil.
On Obama’s Regulatory Reform Plan
And Senator Charles Schumer D-NY said having “one regulator who has the powers is the right way to go.” He expects the regulatory reform proposals to reach a conclusion by the end of the year.
- Geithner Urges Lawmakers To Move Quickly on Reforms
Natural Gas Correcting for Oversupply
As a result of new technological advances, the supply of natural gas in the US has become overstocked, causing its price to be unaffected by the spike in oil prices, said Rick McCullough of Petroleum Development. McCullough said they were “a little shy” of moving backinto supply and demand equilibrium.
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