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June market outlook


US Stock market Well, the uptrend in the market is runing into some serious headwinds. Easy money coming from the FED does make a difference, but we still have lousy unemployment numbers and oil at all time high, consumer confidence in the toilet, housing crisis still going strong. The old adage "Sell in May, go away" sounds like a pretty good advice right now.
Oil Oil is at an all time high, and our friends, the Saudis, say they see no reason to increase production. With friends like these, who needs enemies. Some are saying it's going to $150 per barrel real soon.

Dollar We keep hearing how the dollar is oversold and is going to strengthen against other currencies. Maybe, but long term, the trend is down, down, down.

Gold Gold is at about $900/oz - down about 10% from the all time high. But starting to creep back up again. We repeat last month's stance - with Ben "the Printer" Bernanke flooding the country with money, we don't see gold falling any time soon.

Residential Real Estate in the United States continues its price "adjustment" - prices keep falling. While the Fed's lowering of interest rates eased the pain a bit, and the rate adjustment freeze helped a bit, we should not kid ourselves - there is more pain to come and it will stretch out for a long time. On the flip side, if you are looking to buy property - this is definitely a buyer's market. For current valuations, lenders are estimating prices based on last year minus 25%, and predicting another 20%-25% drop this year. Ugly.

Having said all of the above - please remember that NOBODY can predict the markets. Best we can do are educated quesses - that's why risk control is so important when trading or investing in the markets.

 

 


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