Stocks , Dollar, oil price outlook Dr. Warren Huang

US Stocks plunge in correction to housing market slump, ECB  hold interest rate cut, Dollar gain strength  Oil prices  , inflation worry continue

Comment by Warren Huang on Wall Street Journal Market Beat Blog - May 7, 2008 at  7:37 pm

Stock market plunged 206, finally give up its recent gain on banking, finance, IT shares despite mounting write down and loss in mortgage loan default. It is not because of oil price soared to record level ( It is used to it , even gain on oil shares performances.) Bullish speculators speculate the worst of credit crisis is over, in led to over 30 -50 % gain in these share, will loss most of its gain in a bear trap, as housing price slump will continue, soaring oil, commodities price, foreclosure, job cut drag consumer confidence to deep recession level. Betting on the interest rate and banking, finance, housing market rebound will repeat last summer trillion dollar loss, facing double dip inflationary recession in Feds ending rate cuts cycle.10 year bond yield will repeat last summer break 4 % It is premature to speculate ECB will cuts rate before summer at current oil, commodities prices and inflation level. So dollar has limited speculation room as rising oil price, inflation. But Fed is not to switch to rate hike cycle before housing price slump ends. details on www.osawh.coom/Fedcrisab.html

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