Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market, Commodities and Economic Forecasts 2010

Stock-Markets / Investing 2010 Dec 20, 2009 - 07:29 AM GMT

By: Sean_Brodrick

Stock-Markets

Diamond Rated - Best Financial Markets Analysis ArticleI think 2010 will be dominated by many of the same themes that shaped 2009, but new forces will come into play as well: Forces including …


A Split Personality Global Market. I expect developed markets to continue to lag, and emerging markets to lead. To be sure, there is a big debate in the investing world over whether China’s recovery is real or not. I think China’s recovery is as real as our recovery, which is also based on government stimulus.

And when you think about it, considering the Fed has printed nearly $1.5 trillion and the U.S. government injected about $500 billion thus far via the fiscal stimulus, as well as the money for the Fannie/Freddie bailouts, the AIG bailout, GM bailout, the TARP, as well as other additional spending — well I think the Chinese are getting a bigger bang for their buck.

So yes, China should outperform. But it’s not just China. We’re also seeing recoveries in India and other Pacific Rim countries, as well as Latin American nations and emerging markets generally. So, they may lead the global economy in 2010.

I think global ETFs, and country-specific ETFs, like the iShares MSCI Chile Index (ECH) will be good ways to play this trend.

Government Will Be America’s Big Spender. The Fed is making noises about winding down its fiscal stimulus — that includes the bank bailouts, because I guess even public-trough-fattened bankers can only fatten up so much. But I believe this is just a precursor to the government shifting spending to more direct support of the economy.  We’ll see more government creation of jobs, and also the “cash for caulkers” program, which will be a huge boost for the home-makeover industry, plumbers, electricians, independent contractors, and more.

Billions of dollars will be spent on “green” technologies in 2010.
Billions of dollars will be spent on “green” technologies in 2010.

Also, companies that can profit on “Smart Grid” technology will do well. More than $80 billion will be spent on energy projects, appliances, health-care information systems and wind farms, and $3.4 billion will be spent specifically on America’s electrical grid.

Defense stocks will also do well — America is fighting two wars that show no sign of ending. Military budget could rise to as much as $734 billion, or 10% more than the peak under Bush.

There are a number of ways to play this trend. As I’ve been saying on my blog, the shift in stimulus should be a big boost for Lowe’s (LOW) and Home Depot (HD). But you can play the boost in new energy tech with the PowerShares Clean Energy Portfolio (PBW). And you can ride the defense wave with the PowerShares Aerospace & Defense ETF (PPA). Heck, if Uncle Sam is footing the bill, you don’t want to fight this trend.

Natural Resources Feeding Frenzy. Nothing goes in a straight line, so it’s no surprise that the big commodity bull market has been taking a break. And they could go lower yet, as the U.S. dollar rally probably continues into the early part of 2010. But the big trend is up for commodity prices …

Weekly chart shows the CRB Indes is in rally mode and has yet to test overhead resistance.

The big miners and producers can see the strengthening trend in commodities as well, and I think this will precipitate a shopping spree in natural resources. Even before last year’s financial crisis knocked them for a loop, the big companies had already cut back on exploration and production, canceling or scaling back new projects. Now, there are big gaps in their pipelines of projects — gaps they need to fill. It’s easier for them to buy resources than to develop the resources themselves.

That’s why, earlier this week, we saw ExxonMobil buy XTO Energy. In one fell swoop — at a cost of $31 billion in stock — Exxon is expanding in shale gas, an area that has seen tremendous growth, and increasing its gas resources by 45 trillion cubic feet, roughly equivalent to two years of domestic demand.

There has been a trickle of mergers and acquisitions going on in the resource space, but it could quickly turn into a flood in 2010.

The booming population is putting massive strains on the global freshwater supply.
The booming population is putting massive strains on the global freshwater supply.

If you’re looking for likely takeover targets, check out the components of funds like the Van Eck Market Vectors Junior Gold Miners ETF (GDXJ) and the U.S. Global Investors Global Resources Fund (PSPFX).

The Water Wars Could Start to Heat Up. You probably know that experts are worried about future water supplies not only for the developing world, but also Europe and America. Earth’s population has tripled over the past 100 years, meaning water requirements have soared. In fact, global water consumption has increased nearly twice as fast as population growth in recent years, and some projections expect the water industry to be a trillion-dollar market as early as 2020. Some other facts from the experts …

  • Only 3% of all the water in the world is fresh water. However, of that 3%, two-thirds is locked up in icecaps and glaciers. In the end, we can only consume 1% of the world’s water supply.
  • Experts estimate the global population will rise from 6.8 billion today to 9.2 billion by 2050. I think we’ll run into Malthusian limits before then, but there will still be significant new demands on the existing water supply. The daily Western requirement for water — just to assure survival and minimum living standards — is about 13.2 gallons per person.
  • It takes 14 gallons of water to grow a pound of grain, 435 gallons to grow a pound of beef, 2,000 gallons of water to make one gallon of milk, nearly 20,000 gallons of water is needed to make one ton of steel. The growing world is using more commodities all the time, and people in emerging markets want to eat and drink like the big good ol’ boys in America. That means each person will be using even more water.

And while you can substitute various alternate fuels for fossil fuels like crude oil, there is no substitute for water.

So, I think water is a commodity for the long term. The conundrum for investors is that water doesn’t trade on an exchange. However, there are three exchange-traded funds listed in the U.S. that track the water industry to varying degrees: The PowerShares Water Resources (PHO) focuses on U.S. stocks. The PowerShares Global Water (PIO) is more global in scope, as is the Claymore S&P Global Water ETF (CGW).

Do your own due diligence before you add any of the funds I’ve mentioned to your portfolio.

Come what may, 2010 should be an interesting year for investors. I hope 2009 was good to you, and 2010 will be even better.

All the best,

Sean

This investment news is brought to you by Uncommon Wisdom. Uncommon Wisdom is a free daily investment newsletter from Weiss Research analysts offering the latest investing news and financial insights for the stock market, precious metals, natural resources, Asian and South American markets. From time to time, the authors of Uncommon Wisdom also cover other topics they feel can contribute to making you healthy, wealthy and wise. To view archives or subscribe, visit http://www.uncommonwisdomdaily.com.


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


Post Comment

Only logged in users are allowed to post comments. Register/ Log in