BY "Then" I don't mean the distant past, I mean this past April. The US stock market had been rising for a year (with the occasional hiccup) and investors had begun to heal some of the psychological scars inflicted by the financial crisis and global recession. Economic signs had begun to point to recovery. On April 26th the DJIA closed at 11,206 - it's highest level since the Lehman/AIG/Merrill Lynch collapse of September 2008.
And then: news of the gulf oil spill began to hit the public consciousness (the explosion that touched it off happened on April 20th), the analyst community was "apprehensive" about 2nd-quarter corporate earnings, and some investors began to think that the recovery in stock prices since March of 2009 was over. So May and June saw plenty of pessimism and markets declined steadily.
What changed? Turns out the sky hasn't fallen after all. Corporate earnings have been mostly good, suggesting continued economic recovery. Interest rates have remained low and have helped the housing market. And the stock market has rebounded 9% since it's low on July 5th, rewarding investors who chose wisely and sat tight.
Watch for more good earnings news this week.
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).