A time for patience

Article Abstract:

A major drop in stock prices is unlikely for three reasons. Firstly, the bull market has developed a strong momentum which is unlikely to be reversed without a major global shock. Secondly, stock prices appear linked to the US dollar, which does not show signs of weakening. Thirdly, equities are unlikely to collapse for a sustained period unless bond yields rise and monetary policy is tightened. The US Federal Reserve does not appear to be about to tighten policy, though US domestic demand gives cause for concern. The monetary position of the United Kingdom is somewhat different, however.

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The growl of the bear

Article Abstract:

The US and the UK are to increase short term interest rates although Wall Street has been more resilient to rising short rates and bond yields compared to London. US investors are expecting the Federal Reserve to restrain economic growth without recession. The London market is still depressed with the threat of higher short term rates and rapidly growing GDP, inflation and retail sales.

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Market predictability becomes a random walk

Article Abstract:

Trends and patterns in British and US stock prices are examined in detail to assess predictability.

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