Stock Markets Discounting Post Covid Economic Boom
Stock-Markets / Stock Market 2021 Feb 22, 2021 - 01:31 PM GMTBy: Nadeem_Walayat
The stock market has continued to confound all of the doom merchants out there who blindly continue to point to the worst economic contraction since the great depression if not in history for most western economies. All whilst the Dow pushed its way to a new all time high into the end of 2020 and has continued to march ever higher during 2021 in response to which most investors have faced a barrage of that messages that the bubble is always about to burst, whilst my Patrons have received an unequivocal consistent message that this bull market has a long ways to go and that investors should not look a gift horse in the mouth when all of the stocks on my AI list were typically marked down by over 1/3rd against their Pre pandemic trading levels during March 2020.
The Stock Market Big Picture
This bull market began in March 2009! That's nearly 12 YEARS AGO! This is an AGEING BULL MARKET on any traditional measure so it's no wonder that many investors who have missed the greatest bull market in history are desperately seeking it's END in the rambling of broken clocks with their perma end of the bull market Armageddon messages that populate the mainstream financial media. THE END IS ALWAYS NIEGH!
However, against this we have the AI mega-trend that to me suggests this stocks bull market has got many more years to run, well AI tech stocks have at least, that the general stock indices should track to some degree given the ever increasing weight that AI stocks tend to play in their composition, as well as boosting overall corporate productivity.
Post Covid Economic Boom
Given the mountain of pent up consumer spending that so far is making it's self largely felt in the tech space due to unprecedented demand for work and play from home products and services such as computers and components. Then how could the stock market trade lower than where it stands today? Yes the stock market IS discounting the coming boom to some degree, but only partially. As the depression that is Q1 ends so will it be followed by an economic boom starting in early Q2 and keep gathering speed into the end of the year, the key indicator towards which is the roll out of the vaccines, the UK will achieve it's primary goal by the end of March i.e. all over 50's vaccinated. The US maybe by the end of April.
So yes stocks are going higher, much higher than where the ended 2020 and much higher than where they stand today. All whilst the perma fools look for that always imminent market tops.
The consequences of the boom will be to further stoke REAL Inflation which is already probably triple the garbage they call CPI. All whilst interest rates remain firmly parked near zero with again many falling for the red herring of rising bond yields.
So expect to pay much higher prices for EVERYTHING! For whether it's reflected in the official inflation indices or not, we are in for an INFLATIONARY BOOM.
This article is an excerpt form latest extensive analysis that concludes in detailed stock market trend forecast for 2021 that has first been made available to Patrons who support my work.
Dow Stock Market Trend Forecast 2021
- UK Coronavirus Pandemic Current State
- US Coronavirus Pandemic Current State
- Stock Market Forecasts and Analysis Review of 2020
- The Stock Market Big Picture
- Post Covid Economic Boom
- GAMESTOP MANIA BUBBLE BURSTS
- FED Balance Sheet
- Dow Short-term Analysis
- Dow Long-term Trend Analysis
- ELLIOTT WAVES
- SEASONAL ANALYSIS / Presidential Cycle
- Stocks Bear Market / Crash Indicator (CI18)
- Dow Stock Market 2021 Outlook Forecast Conclusion
As a guide here's my forecast conclusion for 2020 -
31st Dec 2019 - Stock Market Trend Forecast Outlook for 2020
Dow Stock Market 2020 Outlook Forecast Conclusion
Therefore my forecast conclusion is for the Dow to target a trend to between 30,750 and 31,000 by the end of 2020. For a likely gain of 8% to 9% for the year (on the last close of 28,642).
My series of 2020 stock market analysis will seek to map out multi-month detailed trend forecasts as was the case for 2019. With the first to be completed during January, going into which my expectations are for a correction early 2020. Which given my bullish outlook implies should prove to be a buying opportunity.
Here is how the Dow trended during 2020 and where it ended the year.
So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat.
My forthcoming schedule for analysis includes:
- AI stocks buying levels update
- UK house prices trend forecast
- How to Get Rich
- Bitcoin price trend forecast
- US Dollar and British Pound analysis
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Nadeem Walayat
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Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.
Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.
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