Financial markets

Is the glass half empty or half full?

With the US markets having rallied since March, up between 22-33% it would seem that this bear market rally maybe coming close to an end. On the earnings front corporate earnings are still mixed negative sentiment seems to be diminishing and many companies are now meeting their consensus forecasts. It would seem that commentators are saying that with the financial stimulus that Governments are injecting into their financial systems and a slow down in the price depreciation of house prices, maybe reaching a turning point or a bottoming in the markets?

Bust with the real economy still loosing jobs and economic indicators still registering negative GDP and output growth is the market too optimistic?
The big question is where does the market go from this point, will it look through the negative sentiment and continue or will the real economy bring it back down to earth with a big correction?

It is my opinion that a correction will happen, and that this will be the final correction. The final correction in this current market cycle, the first correction happened in September through October of 08, and the second with a December rally. The second correction ran through February and March. The final correction will be shorter one and I only see a 10% correction in this one. I anticipate this will happen before September and then the market will finally begins to continue its next growth phase.

I Auto investments

With the possibility of Fiat doing a strategic tie up with Chrysler in the US automarket, does anyone think this will be a successful long term partnership.
Strategic tie up between the European auto manufacturers and the US auto industry have not been successful.

1) Why are they doing this deal, will it allow Chrysler to gain access to capital, financial IP or do Fiat have some new Eco technology?
2) Fiat are a small car producer, with a terrible history in mid size and luxury cars, do they expect to share Chrysler platforms and to help them fill their product gap, or rebadge US cars for Europe. This is not a good strategy as happened with Rover and and Honda in the past.
3) Fiat are looking to rebuild distribution channels in the US, they were not successful in the 80's when they sold cars in the USA.
4) Eventhough it is a non cash deal for Fiat, do Fiat really want to enter the US automobile market where in the next few years it may end up subsidising a poor performing brand because the two larger US brands, GM and Ford have larger market shares and can compete across a broader range of models?

Financial Markets

Once again Wall Street is picking up on positive comments from Tim Geithner. I think the rally is looking for some new news to continue the positive sentiment.
Will that be provided by a significant slow down in the deteroriation in house prices?
The next few days will give us our answer.

Financial markets

Yesterday the US markets rallied strongly after Tim Geithner gave the markets a glimer of hope. He said the US banks had enough capital or access to enough capital to see them through the downturn Today the IMF has come out and said the global bank write offs may be larger than expected.
Is MR Geithner too optimistic and are the IMF forecasts too negative?

Interesting to see that LVMH the French Luxury goods may consider spinning off its Moet Hennessy brands to Diageo.
Are luxury goods stocks a better investment because of the quality of brands and ability to maintain pricing?
Recently PPR's brand Gucci had an increase in sales for that brand.

Investment ideas

Is Tesco still a good investment?
With Tesco posting record profits should investors continue to invest in these shares?
With rivals having such as Morrissons having done better recently the question is, going forward will Tesco be able to increase their international expansion to grow revenues and profits just to compensate for their UK rivals taking market share from their core UK operations.

With growth at a 15 year low, is this a signal to rotate out of this stock into one of their rivals ?

Given the fact that the Aim investmarket in the UK is a self regulating market by the London Stock exchange, will investors be willing to accept this type of risk supervision going forward when other markets are looking to bring in tighter regulations.
For the survival of the Aim market in the long run, should they consider moving to FSA regulation?
As an investor i think this may happen as the companies on Aim are very risky and in the new world of investments, the appetite for such risk is disappearing.