2013 stock market confidence?

[Anonymous]

How are people feeling toward potential stock market returns in 2013? Personally, I think prospects look pretty good. The economy seems to be picking up, housing looks good, businesses are hiring, etc.

[Anonymous]

6 to 7% average return
Will dip fiercely 3rd week of February, bounce back in march.

[Anonymous]

Why the specific prediction pp?

[Anonymous]

10 years of boom times ahead. Can you say North Dakota?

[Anonymous]

I would buy a house or 2, I don't trust stocks anymore.

[Anonymous]

Anonymous wrote:Why the specific prediction pp?

Option chains are showing this prediction broadly. I expect it's market Pre-empting the 2nd fiscal cliff showdown.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why the specific prediction pp?

Option chains are showing this prediction broadly. I expect it's market Pre-empting the 2nd fiscal cliff showdown.

What is an option chain?

[Anonymous]

I'm not so optimistic. This area could get hit pretty hard when Congress finally agrees on gov't budget cuts. Gov't contractors will likely feel some pain, and if there are furloughs then there could be real trouble in DC.

[Anonymous]

Anonymous wrote:I'm not so optimistic. This area could get hit pretty hard when Congress finally agrees on gov't budget cuts. Gov't contractors will likely feel some pain, and if there are furloughs then there could be real trouble in DC.

Yep, Fed here. We've got RIF on the drawing board. That, plus a pop in interest rates, spells doom (or at least downturn) in houses. Don't buy one as a hedge, just to live in, for quite a while.

[Anonymous]

If price of oil stays moderate or down, if interest rates stay moderate or slightly up, if unemployment rate only slowly declines, if corporate profits climb some, even slightly, the stock market will reward you, even in the short term.

Oil, check. Interest rates, check. Unemployment, check. Corporate profits? Hmm. 3 out of 4 is good odds.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why the specific prediction pp?

Option chains are showing this prediction broadly. I expect it's market Pre-empting the 2nd fiscal cliff showdown.

What is an option chain?

Short answer: options expire at different points in time. So you can buy "Jan" options or "Feb" options. The price for those options usually reflects the markets belief in the stock, and usually the value associated with the time. An option that lets you buy a stock for $10 that's good for 30 days generally commands a lower price than the same option which lets you buy at $10 for say, 6 months. If you take a few thousand such options and plot their price, it's interesting to note that the late February options don't seem to be running along the trend line. The implication is the market is expecting a drop at that time. It's not really foolproof though, I'm not going to be actively trading on it and I wouldn't advise you to.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'm not so optimistic. This area could get hit pretty hard when Congress finally agrees on gov't budget cuts. Gov't contractors will likely feel some pain, and if there are furloughs then there could be real trouble in DC.

Yep, Fed here. We've got RIF on the drawing board. That, plus a pop in interest rates, spells doom (or at least downturn) in houses. Don't buy one as a hedge, just to live in, for quite a while.

What's your prediction for LIBOR? Our models have a 2% increase by 2016.

[Anonymous]

Anonymous wrote:If price of oil stays moderate or down, if interest rates stay moderate or slightly up, if unemployment rate only slowly declines, if corporate profits climb some, even slightly, the stock market will reward you, even in the short term.

Oil, check. Interest rates, check. Unemployment, check. Corporate profits? Hmm. 3 out of 4 is good odds.

If there are RIFs, then unemployment in the area could go up. So now you're only batting .500. I'm a two-Fed salary household. If there are 22 days of gov't furloughs, we might have to consider foreclosing on our house, which I think would be a first in our neighborhood, as even in the bad times there were no foreclosures in our area.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If price of oil stays moderate or down, if interest rates stay moderate or slightly up, if unemployment rate only slowly declines, if corporate profits climb some, even slightly, the stock market will reward you, even in the short term.

Oil, check. Interest rates, check. Unemployment, check. Corporate profits? Hmm. 3 out of 4 is good odds.

If there are RIFs, then unemployment in the area could go up. So now you're only batting .500. I'm a two-Fed salary household. If there are 22 days of gov't furloughs, we might have to consider foreclosing on our house, which I think would be a first in our neighborhood, as even in the bad times there were no foreclosures in our area.

RIFs are absolutely no fun. But the local area unemployment has little to do w overall stock market returns. I'm sticking with 3 out of 4.

[Anonymous]

^^^I see your point, but the gov't has workers all over the country. If there are RIFs, then gov't workers everywhere will feel it. I'm guessing that on one hand the markets will like to see some cuts in gov't spending, but at what level will those cuts do more harm than good? RIFs could affect the entire economy, not just the local one, as DoD workers, park rangers, border agents, etc. all across the country are suddenly without pay.

And what about entitlement programs? Are they going to cut those? What will that do to the entire economy?