Meredith Whitney, the widely followed stock analyst last night issued a buy verdict on financial stocks. This moved market capitalization by the billions with financial stocks rallying between 6-10% yesterday. Ironically, few cared to digest what she had to say. Essentially, she said banks such as Goldman would do well, as growth would be very slow in the US, and more would have to turn to the capital markets for funding, benefiting banks like Goldman. She reiterated her "sustained bearishness" view of the US economy. Now, how would a "sustained bearishness" of the US be good for stock markets in general? I guess few read the report. Selective reading.
In the meantime, Asian markets got another boost when Singapore announced a better than expect 20.4% annualized quarter-on-quarter jump in 2Q09 GDP. This beat consensus forecast of 13.4% growth. Year-on-year, growth still declined by -3.7% but the pace of decline moderated. Very quickly, analysts queued up to offer their bullish take on Asia. Asia is bouncing back in a V-shape manner, they exclaimed. Others suggested that Asia will see sequential improvement in underlying demand.
Still, there were the nay-sayers... that said growth will peter out unless there is recovery in the advanced economies. And for now, "we'll really getting ahead of ourselves". So who is right? For now, as we approach lunch time, the index is up about +1.5%...Bulls are leading.
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