I generally follow two stock markets – India and US. And for the last few weeks things are looking all bright and rosy. The Indian stock market is once more over 20,000. The US market has been rising for the last three weeks and maybe we might have a fourth week of gains.
The recession is supposedly over, and things should be looking rosy all around as we are in recovery. But the only problem is that the recovery might be slow and painful. Housing has not recovered. There is the 10.5% rise in home construction in August but that is just one data point amongst a long period of doldrums. Unemployment has not dropped significantly. Taxes will rise if the Bush cuts are not extended and my feeling is that consumers and businesses will be reluctant to spend for a while to come. The acquisition spree in the tech industry (Intel Acquires McAfee, HP acquires 3Par and more, 3Com acquires Cogent, Intel acquires Infiineon wireless division, IBM to acquire Netazza etc.) might be an exception to business spending but it looks like they are more interested in spending on acquisitions as opposed to hiring.
My take is the recession might be over but we are not out yet. I’m waiting for another dip before buying any more stocks. After all where are the jobs?