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Summary of Financial Markets and Economic Forecasts

Stock-Markets / Summary Forecasts & Analysis Apr 23, 2007 - 12:43 AM GMT

By: Nadeem_Walayat

Stock-Markets

The following represent the Editor of the Market Oracle, Nadeem Walayat's summary forecasts of the most probable outcomes, as derived from technical analysis, intermarket analysis and research of fundementals, much of which are published as in-depth articles on this site. Updates and New forecasts are added on an on-going basis.

Commodity Markets
Gold

21st Jan 07 - $636 - Gold Bull Market set to resume, targeting a rally to initially $847 and then $900 by the end of this year.

19th April 07 - $688 - A Word of Caution to Gold Bulls, Elliott Wave suggests possible weak 5th Wave Peak, implies sharp sell of on failure to clear the $733 prev peak.


Crude Oil

14th Dec 06 - $64 - Crude Oil to fall sharply during early 2007. This will represent a good long-term buying opportunity .Expectations are for Crude Oil to move in a wide trading range of between $80 and $40 for some years before then next leg up to $100

20th April 07 - $64 - Crude oil continues to trend higher towards $75, the upper boundary of its range.

Buy and Sell Gold On-line Securely
Uranium

3rd Feb 07 - $90 - The Uranium bull market shows no signs of halting its trend, next target is $100, then $120, before the end of this year.

25/3/07 - Uranium passed $100

20th April 07 - $113 - Uranium has passed $113, the target of $120 looks like being hit well before year end.

Coffee

19th Feb 07 - $113 - Coffee Bull Market Brewing - Coffee to make a base and target a rally to $152 and then eventually $172

20th April 07 - $108 - Coffee has failed to make a base though the drift lower is mild

 
Currencies

GBP/USD

Short-Term

4th March 07 - $1.94 - The British Pound is targeting a significant downtrend to $1.8600 by early May 2007. Resistance to negate the downtrend is at $1.9661.

21/3/07 - The rally to beyond 1.9661 has negated this short-term forecast.

GBP/USD

Long-Term

4th Jan 07 - $1.95 - It is only a matter of time before the British Pound breaks above $2.00 to target a new high of possibly $2.10. In the meanwhile expect range bound activity between $1.99 and $1.80. The Breakout to $2.10 may prove to be short-lived and could coincide with the end of the GBP Bull market as has occurred on previous runs to $2.00.

18th April 07 - The GBP/USD has hit $2.00. Further gains are so far not forthcoming. The inflation figures due in May 07 and June 07 will determine whether there will be further gains or a serious sell off.

 
Economics
US Economy

15th Feb 07 - The same old battle between inflation and deflation expectations, with currently inflation taking the upper hand. The economy is expected to continue to slow into end 2007. The US should end the year with between 2.25% and 2.75% GDP growth. Which by US standards is low.

21st April 07 - Economic indictors suggest that an recession is imminent.

UK Economy

15th Feb 07 -The UK economy like the UK Housing market is remarkably resilient .I expect the UK economy to continue growing during 2007, regardless of what happens in the US, and is targeting healthy growth of between 2.5% and 3% GDP by year end.

20th April 07 - Increases in interest rates to 5.75% should start to slow the UK economy during the 2nd half of 2007. Though the economy is still on target for growth of 2.5% to 3% this year

 
Housing Markets / Real Estate
US Housing

5th Feb 07 - The Housing market is expected to remain weak going into the Summer when there is a possibility of a bounce, i.e. stablisaition for the period going into September 07. Thereafter the market may again resume the downtrend that has been in force for over 12 months.

20/3/07 - Subprime hits headlines in Feb / March, weakness continues as forecast into Summer

UK Housing

25th Feb 07 - The UK Housing market is expected to peak in the summer with annualised growth approaching or exceeding 10%, thereafter the market is expected to slow and end the year Up in the range 5 to 7%. It is too early to say if the UK will follow the US into a property slump in 2008, but all bubbles do eventually burst.

26th March 07 -The UK housing market is strengthening leading up to the traditionally strong summer period. The market is anticipated to slow sharply following a summer peak to end the year up as per target.

 
Interest Rates & Bond Markets
US Interest Rates

31st Dec 06 - 30Yr Tbond 111.44 - US Interest rates to rise into May 07, then the bond market to make a base and rally into the year end as the US economy weakens.

8th March 07 - 5.25% - This is a really tough one, as I believe we are either at a juncture or approaching a juncture. Therefore there may be 1 more rise in US interest rates before the cutting cycle begins, or they next move will be a cut. The cutting cycle depends on inflation, as if the US economy enters a period of stagflation, then the room for cuts will be very tight.

11th April 07 - Uncertainty whether further interest rate rises will occur.

UK Interest Rates

7th Nov 06 - 4.75% - UK Interest rates to rise to 5.75% by about Sept 07, as the Bank of England does battle with inflation.

7th March 07 - 5.25% - Next rise to 5.5% is likely in May 07.

18th April 07 - UK Interest rates to rise to 5.5% in May 07, and then 5.75% by Sept 07 - Interest rates are moving as per original forecast.

 
Politics & Social
Tony Blair
17th Jan 07 - When will Tony Blair Leave Office ? - After the May 07 Elections, barring any thing going wrong with Gordon Brown. Tony Blair is expected to Step down between Mid June and Mid July 2007.
Attack Iran

3rd Feb 07 - Military Strikes Against Iran ? - There has been talk about strikes / military action against Iran for some 2 years now. Though with the US building naval forces up in the Gulf, the risks have increased somewhat. However the probability is still for NO strikes against Iran this year.

18/3/07 - Kidnapped British Navy Personnel, despite the rhetoric unlikely to impact the scenerio of no action against Iran. They will probably be released within a month or so. There is NO chance of any British attempt at rescue, ZERO.

4th April 07 - British military personnel released.

 
Stock Markets
Dow Jones Indst Av. Short-Term

15th Mar 07 - 12160 - The Dow Jones is expected to rally into Late April / Early May, towards its All time high.

20th April 07 - 12920- The Dow has rallied to a new high, but is now approaching the anticipated weak period as we go into late April / Early May.

Dow Jones Indst Av. Long -Term

26th Dec 06 - 12463 - Volatile trend during the year, Dow Jones to end 2007 up for the year, unable to say how high as there are negative drags on parts of the indices such as the Housing market slump which is expected to continue at least into mid-year. Therefore a low in the Dow Jones can be expected mid-year. But fundamentally unlike many analysts, I just don't see the stock market as being expensive.

22/3/07 - Held up strongly during the recent sell off, though major test in May / June still due, will determine how strong the Dow will be going into the 2nd half of 2007.

FTSE 100 Short-Term

13th Mar 07 - 6160 - FTSE is targeting a rally to 6450 by late April / Early May. Expect 6000 to hold on any short-term weakness as heavy support in that region.

20th April 07 - 6486 - FTSE Moves beyond its target of 6,450 which is a sign of strength, still expecting a correction to begin by early May.

FTSE 100 Long-Term

29 Dec 06 - 6221 - FTSE's New year rally to peak and be followed by a fall in the FTSE to 6000 by March 07, next a rally to early May 07, and another decline towards 6000 by July 07. A strong rally into the end year will follow , with a target of 7000, a gain of some 9% for the year.

20th April 07 -- 6486 - FTSE, despite an anticipated correction, is still on target to reach between 6900 and 7000 this year.

Japan - Nikkei Index

2nd Jan 07 - 17225 - Japan is finally recovering from 10 years of deflation with signs of economic activity picking up on the back of China's growth. The Japanese stock market is probably one of the fairest priced of the developed worlds stock markets and continues to target a trend to 20,000 this year..

20th April 07 -

China - Shanghai Index

27 Dec 06 - 2675 - Shanghai Index to be weak first quarter, then should rally for much of the year to continue its multi-year bullish trend on the back of a strong economy and profits growth. Sell offs should be viewed as buying opportunities

7/3/07 - Sell off in late Feb was a good buying opportunity - Expect more selling around mid year for another op.

20th April 07 - 7057 - Despite anticipated strong correction, still view sell offs as potential buying opportunities.

India - BSE Index

27 Dec 06 - 13,800 - I expect India's Bombay Stock Exchange Index to be much weaker than China, due to poor infrastructure. And same as with China, I expect a weak first quarter, and a weaker rally into the year end for possibly a small gain for the year. Though I would view any significant sell off in the mid-year as a good buying opportunity for the long-run

7/3/07 - India lagging China, more weakness expected. Watch mid-year sell off for possibly buying opp.

20th April 07 -13,897 - India as expected continues to lag, with virtually no net gain for the year to date. However a serious sell off would still represent a buying opportunity.

 

By Nadeem Walayat, The Editor
MarketOracle.co.uk

Copyright © 2007 The Market Oracle- All Rights Reserved. Any republication without the written permission of The Market Oracle is Strictly Prohibited.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Comments within the text should not be construed as specific recommendations to buy or sell securities. Individuals should consult with their personal financial advisors before engaging in any trading activities. We do not in any way warrant or guarantee the success of any action you take in reliance on our forecasts.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Jo
09 May 07, 00:54

Its may now, shouldn't the stock market have started falling by now ?

You need to update your forecasts more often, once a month is not good enough.


Nadeem_Walayat
09 May 07, 09:26

Hi Jo

The forecast for a decline in the stock indices starting during early May remains intact.

I am, aiming to increase the frequency of updates, though with the number of forecasts involved i.e. not one, but more 20, this can be an immensley time consuming process, however the initial forecasts involve indepth analysis and research and therefore are as reliable as I can make my 'best guess' on future price action.

Also, we are working on something new for the marketoracle site which is occupying our time resources, which is to be rolled out this weekend.

However I will at least try to update some of the forecasts namely stock indices and interest rates this weekend, in the light of where we stand in terms of juncture timing.

Cheers !

Nadeem


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