Stock and Commodity Market Forecasts for 2009
Stock-Markets / Investing 2009 Jan 05, 2009 - 01:01 PM GMTBy: Oxbury_Research
The Year of the Snakes - It's that time of year again. The obese pledge to hit the gym, the drunks plan to switch to soda, and the smokers will run to the nearest convenience store for their nicotine patches. As is the American way, very few of those who confront their self proclaimed character flaws will have the fortitude to see their goals through.
I have been asked several times over the past week or so if I've made any New Year's resolutions. I usually answer that question with a simple no, but it's not entirely true. You see, 2008 was a big year for us because of our ability to analyze and foresee what's to come in financial markets.
In doing so, I was forced to feed through the financial media garbage, and in turn share with you the truths I discovered. That same notion has turned into a sort of obsession at this point. A large reason for this particular obsession is the deterioration of main stream financial media coverage, and I only expect this trend to worsen.
So although I'm not planning to shed 20 pounds or rid the world of violence, I do have goals for 2009. The wonderful thing is that my interests are aligned with yours. If you've been a reader of mine you should know this. I don't believe in working with a conflict of interest, and if in my desire to accumulate and grow capital didn't align with your interests, then this relationship wouldn't work. So, lucky us.
What comes with resolution time is prediction time. I would like to briefly share with you some of my expectations for 2009.
Bring on 09
I'm not going to make this overly formal here. I would just like to share with you some of my thoughts. Without further ado...
One of the biggest stories in 2009 will be the return of inflation in the second half of the year. The growth in the monetary base has been phenomenal and it's always been a matter of time before that turns into inflation. I expect monetary inflation to outpace declines in global growth when it comes to asset prices.
I wouldn't be surprised to see one more strong pull back in gold before we surpass the $1500 /oz level.
Oil may or may not go to $25 /barrel, but I do expect a strong turn around to triple digit figures by the end of 2009.
Look for the agricultural commodities to outpace the economically sensitive commodities. People will always have to eat.
I expect domestic equities to be strong early in 2009 with the S&P 500 surpassing the 1000 level. I expect this to be met with a "everything is all better, deficits don't matter" attitude. Unfortunately I expect it to be short lived and this coming fall will be a messy one. Look for levels of panic and fear to surpass what we saw during some of the worst weeks this year.
Commercial paper markets will go caput and the leveraged assets tied to them will blow up.
I wish I could say for sure that that Treasury market will blow up in 2009, but I can't. I brought this story forward several months ago, and now it's a daily topic on CNBC. That makes me believe this bubble has a little life left to go. Just remember, the longer the bond bubble runs, the more destruction the dollar must take.
I expect a whole bunch of government money to be spent in new and creative ways that simpletons like myself couldn't possibly predict. Obama proclaims change, while I expect 2009 to be the first of four years of the same exact policies that got us into this mess.
I can't say I'm optimistic for 2009, and I expect it to be an especially volatile one in financial markets. There will be lots of opportunity, but I expect playing these markets will be even more difficult than it was in 2008. It's a challenge that I look forward to meeting head on.
By Nicholas Jones
Analyst, Oxbury Research
Nick has spent several years researching and preparing for the ripsaws in today's commodities markets. Through independent research on commodities markets and free-market macroeconomics, he brings a worldy understanding to all who participate in this particular financial climate.
Oxbury Research originally formed as an underground investment club, Oxbury Publishing is comprised of a wide variety of Wall Street professionals - from equity analysts to futures floor traders – all independent thinkers and all capital market veterans.
© 2008 Copyright Nicholas Jones / Oxbury Research - All Rights Reserved
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 losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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