It was a monster day for stocks yesterday, as continued good earnings gave a lift to the market. As expected Bonds dropped hard as appetite for risk increased, and in turn the dollar got smacked across all currency pairs, which in turn lead to a rise in crude.
Bunds hit the lower target yesterday of 121.30 and is now looking for a drop below 121. Results later today by Bank of America will set the tone for this session, and another big earnings will like propel the Dow to 9000 within the next few weeks.
However some still feel we will be heading much lower.
Gary Shilling who appeared on TechTicker had the following to say:
The economy won't start to recovery until 2010 (versus the current consensus of now). It will recover because the government will be forced into a second stimulus.
The US consumer rules the world...and the US consumer is cutting back fast
Consumer spending will drop from 70% of GDP to 60% as consumers pay down debt and go on a saving spree.
Most recessions have a positive quarter or two of GDP, so if we get one, it won't mean anything.
The S&P will plunge 35% to 600 by the end of the year.
Buy Treasuries
He is not alone in this view, but for now it looks like we are heading higher again.
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