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Latest topics
» KZOO ... KZOO ...Stock Buy Back underway ?
by The Hunter Today at 7:01 am

» VALLIBEL FINANCE PLC
by Yahapalanaya Today at 5:21 am

» Comparison TAFL,BFL & GRAN
by wisdom Today at 3:40 am

» UDPL Next Run soon
by kovida Yesterday at 10:58 pm

» කිංස්බරි හෝටලයේ විදුලි සෝපානය මනාලයා සමග හිරවේ.. මංගල උත්සවය ජංජාලයක් වෙයි.. මනාලයා වන්දි ඉල්ලා නඩු යයි.
by dsam Yesterday at 10:11 pm

» CFVF run Will start soon
by nimantha80 Yesterday at 7:46 pm

» Financial Instrument- Lease BG/SBLC
by leasingmandate Yesterday at 2:39 pm

» HVA.............? wtz gonna happen with HVA?
by anjelo Yesterday at 1:53 pm

» watch CSF
by kjojo Yesterday at 12:21 pm

» RENUKA CAPITAL PLC (KZOO.N0000)
by The Hunter Yesterday at 10:08 am

» ගංගා මෑණියන්ගේ බැල්ම ලගදිම කොටස් වෙලදපොල දෙසට
by ranferdi Yesterday at 7:57 am

» + Point for Market : IMF reaches staff level agreement on third review of Sri Lanka’s EFF
by Ran49 Yesterday at 7:16 am

» Hotels face tough time --- Drop in tourist arrivals predicted/so many new hotels are opening
by kcrRanz Yesterday at 4:55 am

» Asian shares conquer 10-year peak
by kcrRanz Yesterday at 4:51 am

» Ideas about SCAP.N000 ?
by kcrRanz Yesterday at 4:40 am

» PABC : This must pass 20 rs. level very soon
by kcrRanz Yesterday at 4:37 am

» Why CSEC going up....???
by kcrRanz Yesterday at 4:30 am

» why bfl...gran...tafl...not moving
by kcrRanz Yesterday at 3:17 am

» LANKA CEMENT....STILL GOOD
by nimantha80 Mon Oct 16, 2017 10:34 pm

» Time to Talk About How Budget 2018 will Help for Us!
by Dailytrader Mon Oct 16, 2017 7:02 pm

» MBSL - MERCHANT BANK OF SRI LANKA
by Roshan Fernando Mon Oct 16, 2017 2:11 pm

» Today run LOFC 5+
by kjojo Mon Oct 16, 2017 12:45 pm

» LOFC 7+ next week
by kjojo Mon Oct 16, 2017 12:41 pm

» SAMP - ABSORBING REAL VALUE
by niru Mon Oct 16, 2017 11:43 am

» RENUKA CAPITAL PLC (KZOO.N0000)
by Namal Mon Oct 16, 2017 10:54 am

» From today - Watch Watch
by Richman Mon Oct 16, 2017 8:44 am

» IS CTBL.N ready to run ?
by Richman Mon Oct 16, 2017 8:43 am

» Sri Lanka tea prices seen remaining high on global shortfall
by Wimal Modawansa Mon Oct 16, 2017 8:10 am

» Recommended buys in planation
by Wimal Modawansa Mon Oct 16, 2017 8:08 am

» BFN .. ORIENT FINANCE PLC
by worthiness Sun Oct 15, 2017 1:38 pm

» Plantation Sector Summary
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» BUY CFT with expect to cross share 10+
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» HATTON PLANTATIONS LTD
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» WATA N00000
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» MAL N and X
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» Watch DFCC and NDB and guess which one is best
by Captain Fri Oct 13, 2017 11:54 am

» WHY WE SHOULD BUY CFVF...
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» 4 new all-time record prices in Lanka Commodity Brokers Catalogue of 11 Oct. auction
by anjelo Fri Oct 13, 2017 8:58 am

» LIOC run Just started
by Ran49 Fri Oct 13, 2017 7:28 am

» LIOC is going to increase oil price
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» See what these UNP criminals has done to our EPF and ETF, We have to burn these fellas
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» COCR COCR
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» Heavy rainng......But still VPEL & HPFL at very low price
by newone Thu Oct 12, 2017 5:35 pm

» TKYO - Capital Trust Recommends BUY
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» CEYLON TEA BROKERS PLC (CTBL.N0000)
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» DOCK FUTURE hit 120 share
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» keey eye on DOCK
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» look MULL. Today Run
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» MEL.N0000-ANY NEWS
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» NDB Bank PLC
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» UBC - Union bank a hidden GEM
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» Correct time to buy DFCC
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» NTB A RISING STAR
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» Watch the followings
by Harry82 Thu Oct 12, 2017 9:03 am

» WHERE IS TELLER........market down.......ASI 5700...
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» Bank Guarantee/StandBy Letter of Credit(MT760),Project Funding,MT103,Loan.
by kimsungnyon010 Thu Oct 12, 2017 8:17 am

» Bank Guarantee/StandBy Letter of Credit(MT760),Project Funding,MT103,Loan.
by kimsungnyon010 Thu Oct 12, 2017 8:16 am

» Bank Guarantee/StandBy Letter of Credit(MT760),Project Funding,MT103,Loan.
by kimsungnyon010 Thu Oct 12, 2017 8:13 am

» AGST can move
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» ACAP latest penny
by Richman Thu Oct 12, 2017 7:06 am

» Can the oil price remain as it is?
by predictor Thu Oct 12, 2017 6:52 am

» Market is falling continuously
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» COLOMBO SHIT EXCHANGE UNDER YAHAPALANAYA
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» LDEV Price
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» Stock Market Entertainment
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» DOCK FUTURE
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» LLMP N0000
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by kjojo Wed Oct 11, 2017 10:46 am

» look LOFC- Ready to run
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» LOLC towards ...150
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» Is it ok vone
by prasa2004 Wed Oct 11, 2017 8:53 am

» WILL SEYLAN WAKE UP TODAY TO JOIN BANKING RUN??
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» How about LDEV
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» How About CHOU
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» ACME and LCEM
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» LCEM 10/-.......
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» ready to ACME blast
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» ACME 9+ Coming soon
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» Top Ten Tomorrow (TTT)
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» Russiyawata Wada Loki irrisiyawa
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» CFT share එක මොනව හරි දෙයක් වෙනව වාගෙ.
by sameboy Mon Oct 09, 2017 7:11 am

» GRAN $ TAFL......future price moments ?
by kcrRanz Sun Oct 08, 2017 10:40 pm

» Lets we see CHOU as trading shot - as property stocks are rocking
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» BoC, Peoples' Bank NSB officials tell PCol; Ravi told state banks to bid low
by worthiness Sun Oct 08, 2017 10:36 am

» MGT...&....TJL ......? yOUR IDES PLEASE
by kcrRanz Sat Oct 07, 2017 12:19 pm

» GUESS SAMP PRICE BY END OF NEXT WEEK
by worthiness Sat Oct 07, 2017 10:00 am

» How to open online trading account
by sunny Sat Oct 07, 2017 3:37 am

» LLUB and RCL
by sunny Sat Oct 07, 2017 2:57 am

» UML set for run with upcoming budget
by Ryan Hudson Fri Oct 06, 2017 8:48 pm

Equity market indices need to top record highs as the Fed gears up to raise interest rates

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Equity market indices need to top record highs as the Fed gears up to raise interest rates

Post by peacockman on Thu Nov 12, 2015 10:04 am

For more than 6 ½ years, the bull market in stocks has taken everything that’s been thrown at it and come back stronger.
Since March 2009, we’ve seen the end of the Great Recession; a painfully slow and weak recovery; debt crises in Greece, the eurozone and the U.S.; the demise of the commodities super cycle leading to a collapse in prices for everything from oil to copper to gold; secular bear markets in once-booming emerging markets; and heavy new regulation of banks and Wall Street, damaging the critical financial sector.
And yet every major U.S. stock index — the S&P 500 , the Dow Jones Industrial Average , the Nasdaq Composite index  and the small-cap Russell 2000  hit all-time highs this year.
Then came the August sell-off, in which stocks gave up 13% to 14% of their value amid fears the global economy, especially China, was weaker than everyone thought.
At the time, we said it was most likely a correction and stocks would rally. They have, strongly, but last week’s blowout jobs report and a growing belief that the Federal Reserve would raise interest rates in December for the first time in nine years was enough to stop the rally in its tracks, just shy of the previous highs.
And there’s the rub.
For this bull market to resume, it needs to close above those all-time highs — 2,130 in the S&P 500; 18,312 in the Dow, 5,172 in the Nasdaq — and stay there. We’re now about 2% to 3% short.
The stock market gains over the past few weeks came amid mixed signals in the U.S. economy — strong housing and auto sales, fair consumer confidence, and weak job growth in August and September — but almost uniform weakness overseas, especially in China and Europe. That has other central bankers ready to slash rates (China) and keep the printing presses running (Europe and Japan).
This flood of liquidity from global central banks has eclipsed the Fed’s own efforts and in some ways tied its hands, because of concerns about global weakness and the impact of an even stronger U.S. dollar on our own businesses.
Last week’s jobs report was probably a game changer. The 271,000 new jobs created in October and decent wage growth caught everyone by surprise and may finally give Fed Chairwoman Janet Yellen the cover she needs to carry out her long-term plan to raise interest rates gradually and modestly.
One big hint the tide is turning: On Monday Eric Rosengren, the dovish president of the Federal Reserve Bank of Boston, said December “could be an appropriate time for raising rates, as long as the economy continues to improve as expected.” Rosengren will vote on the rate-setting Federal Open Market Committee next year.
But for the indexes to break through their previous highs convincingly, investors need to believe that rate hikes won’t lead to a bear market or recession. So far, they haven’t made up their minds, which explains a lot of the markets’ churning and confusion.
The Fed ended its last round of extraordinary bond buying (quantitative easing, or QE3) on Oct. 29, 2014. In the year or so since, the S&P 500 has gained less than half of 1% as speculation turned to when the first rate hike would occur. Talk about marking time!
And yet there’s some precedent for hope. When former Fed Chairman Ben Bernanke mentioned the end of QE3 in Congressional testimony on May 22, 2013, investors dumped stocks and bonds in what came to be known as a “taper tantrum.” That happened again later that year as the Fed began unwinding its super-stimulus plan.
But when the dust eventually settled, the S&P 500 rose 20% from Bernanke’s first hint of tapering until QE3 finally ended.
This time may be different. Earnings growth is decelerating. As of Friday, FactSet Research said third-quarter earnings for the S&P 500 were on track to fall 2.2% from the third quarter of 2014. That’s less bad than analysts had expected, but it still marks the second consecutive quarter of earnings declines, the first time that’s happened since 2009. Recently, Goldman Sachs, among others, cut its S&P 500 earnings forecasts for 2016.
Meanwhile, the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) have cut their projections for world GDP growth in 2016. If U.S. rates creep up while global economies languish, the strong dollar may reduce U.S. multinationals’ earnings even more.
But right now, all eyes are on the Fed. Everyone will be watching closely to see what markets do if it finally pulls the trigger and then continues raising rates slowly and modestly. The next few months will tell us if this is the beginning of the end for this bull market, or just the end of the beginning.
Howard R. Gold is a MarketWatch columnist and founder and editor of GoldenEgg Investing, which offers exclusive market commentary and low-cost, low-risk retirement investing plans. Follow him on Twitter @howardrgold.

link : http://stream.marketwatch.com/story/markets/SS-4-4/SS-4-87936/

peacockman
Assistant Vice President - Equity Analytics
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