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Macro Trends for 2009 !

Happy new year to all !
Finally 2008 is over - worst year in terms of stocks returns since 1931 ! When 2008 started, absolutely no one expected it to be so bad. Almost all portfolios with are down anywhere between 40 to 70% down. So I decided to start year with making only macro predictions. Here are 5 trends which I will be watching.
  1. With first day of upside, DOW has shown some positive momentum. My prediction is it would cross 10000 (and S&P 1000) by 6/30. However another bull run would start only if it stays above those levels for 3-4 months. Check out ETFs like SSO
  2. Baltic Dry Index (BDI) is down 94% since it peak in Jun 08. It is currently hovering around 800. With mega stimulus packages by Obama and China, I am expecting demand for shipping to increase. BDI would cross 1000 by 4/1 and could touch 1500 by year end. Check out ETF like SEA or stocks like GNK, DRYS, EXM
  3. Oil - it has seen its best and worst years. Now that it has almost touched $30, I am expecting it to go back above $50 and stay between 40-70 range for the year. Check out ETFs like OIL, USO, DIG
  4. Financials and housing would finally start recovering along with corporate bond market. Check out various corporate bonds or preferred in these sector which are yielding between 15-20%
  5. IPO market: This would return only in 2nd half of year possibly paving way for Facebook IPO. I would consider IPO market fully recovered when Facebook goes IPO and its stock doubles on first day of trading. Most likely in 2010 (if Microsoft or Google does not buy it before that)

In all, I am optimistic about 2009 - let's see if that optimism turns out to be real

Good luck !

/Shyam

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