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Does History Repeat Itself?

Published 12/31/2000, 07:00 PM
Updated 01/01/2009, 10:40 PM

Asian trade: Only parts of the Asian markets are open tonight, currently trading on a very low volume and mostly without a direction. At this point in time, the U.S. future market is also closed.

2009 is expected to be a tough year, as most developed countries will face recession and a rising wave of unemployment. The International Monetary Fund expects world growth to slow down to 2.2% in 2009, while 3% is seen as the benchmark between growth and contraction. In this environment, many analysts claim they expect the equity markets to have positive returns, unlike in 2008 when most indexes lost, on average, 40%.

The current bear market touched its lowest point in November, having the S&P drop a little more than 50%. This is comparable with the previous two major bear markets. In 1973-74, the S&P dropped 48% as a consequence of the oil crisis, even though back then the market decline was a little longer than the current one. In 2001-02, the S&P tumbled yet again 49%, but the downtrend lasted almost twice as long than in 2008. Now, the big question is if history will repeat itself, and will the S&P be able to rise from this level? It should also be noted that the S&P tumbled in 2008 as much as it did in the first year of the Great Depression.

Crude oil traded on a very low volume in the Asian trading hours. Crude oil for January delivery rose to $42.60.

Gold is testing again the $880 resistance area. Bullion for immediate delivery lost $12.70 to $873.70.

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