I continue to expect the USD to weaken. For the end of 2008 I would target the USD at 1.75 Euro and against the PLN at 1.60-1.65 PLN. Investors would be well off to look for value stocks in the US and buy them for the longer or medium term.
The Polish economy will remain stable.
The Indian stock market has corrected and will continue still further. However, I advise to start buying stocks from current 13,000 levels. The Bombay Stock Exchange (BSE) is likely to go to 11,000 and worst case scenario to approximately 9,000.
I would recommend the BSE as the real growth market in times to come. That is the market that would give substantial returns. I would expect the INR to grow stronger and settle around 40 by the end of the year. Long term, I expect the rupee to go to 32 to one USD.
Here\'s further analysis of what\'s happening with the market:
- US finds it extremely difficult to stabilize the USD.
- A strong dollar is not in the US\\\'s favor.
- The Fed cannot hike interest rates without upsetting an already a precarious housing market.
- Elections might give temporary respite to the USD. The long-term trend continues to be down for the USD.
- Banking failures in the US will continue, with the latest victims being Freddie Mac, Indy Mac and Fannie Mae and also rumors about Lehman Brothers.
- US external debt is to the tune of 2.2 Trillion USD (read more here - scroll to the bottom). US will pull Japan, China and Europe into this turmoil as well, since they hold large portions of this external debt.
- Asian economies are hit by falling exports and rising inflation.
- Stock markets likely to continue south.
- The Dow is expected to fall further to 10,400 first and just touch below 10,000 before seeing a move upwards. However there is a word of caution. Depends on elections and market might first go to 13,500 before heading down and then finally heading upwards.
- Oil: Very difficult to analyze. Much depends on the situation in the Middle East but prices might correct to $130 and then to $110 per barrel. Likely trend is upwards and $200 per barrel is a possibility.
Disclaimer: Any opinions, news, research, analyses, prices, or other information provided by the author are provided as general market commentary, and do not constitute investment advice. Neither WBJ nor the author is liable for any loss or damages, including without limitation, any loss of profit which may arise directly or indirectly from use of or reliance on such information. Investors are advised to consult their broker before making a decision on buying or selling a particular security, product or currency pair. These articles are opinions and should be treated as such.
