Morgan Singleton Associates President Pleased as World markets Up Modestly Ahead of US Retail News.

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) May 13, 2009 -- World stock markets were mostly higher Wednesday after Wall Street rallied towards the end of the previous day, though investors remained cautious ahead of key U.S. consumer news.
Thought the FTSE 100 index of leading British shares was down a modest 2.76 points, or 0.1 percent, at 4,422.78, Germany's DAX rose 20.28 points, or 0.4 percent, at 4,874.39 and the CAC-40 in France was up 15.99 points, or 0.5 percent, at 3,247.09.

Earlier, in Asia, Japan's Nikkei 225 stock average rose 41.88 points, or 0.5 percent, to 9,340.49, while Hong Kong's Hang Seng dipped 94.02, or 0.6 percent, to 17059.62.

The modest gains in Europe and Asia came after the Dow Jones industrial average's late flurry Tuesday, which saw it close 50.34 points higher at 8,469.11.

The main talking point in the markets though is whether the two-month rally seen in stocks around the world represents a bear market rally or whether it is something more.

Advocates of the bear market hypothesis point to historical precedents, such as false dawns in the stock markets during the Great Depression of the 1930s, and while acknowledging some improved economic signals around the world, they think the optimism has been overdone especially as the banks still are likely to encounter real problems.

Those arguing that the recent hefty stock market gains represent a turning point in the global economic crisis reckon that the forward-looking indicators have pointed to a resumption of growth possibly by the end of this year -- stock markets usually start rallying between 6-9 months before an actual economic recovery emerges.

"We have greater sympathy with the bear market line of attack, but while we are dubious about the ability of this bull market in equities to continue we also do not believe that we are likely to see a rerun of that 1930s dramatic leg lower." said Katherine Davies, President at Morgan Singleton Associates in Seattle.

"Our hesitancy simply reflects the fact that the optimism has swung so far so quickly," the Morgan Singleton Associates President added.

Stocks around the world have rallied strongly over the last few weeks, with some major indexes now in positive territory for the year, prompting some investors to claim the markets are over the worst. Many markets ended last week more than 5 percent higher.

The trigger for the gains has been better than expected economic news, particularly in the U.S., the world's largest economy. Mounting hopes that the global economy may recover before the year's end has fueled an increased appetite for risk. Stock markets usually start recovering between 6-9 months before an actual economic recovery emerges.

Markets have also been buoyed by indications that the banks are now in much better health to deal with any potential losses associated with the recession after raising significant amounts of cash.

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