An Ecomomic Forecast :: essays papers

An Ecomomic Forecast Evaluating the bull marketplace today, it is almost impossible to pick up a financial journal without seeing intelligence information on the bull market that round consider to be overvalued. Overvalued or fairly valued, only the future will show the truth. Either way, this market is single that has shown greater run ups and returns, than any other market in history. (Reference Appendix 1a) Recently the Dow Jones Industrial Average has reached historical highs and then receded back to previous levels, departure investors who are used to consistent and record setting gains month after month, baffled. Both the Dow Jones and the S & P 500 indices have seen modest and even like a shot performances over the past three months. (Reference 1b) A recent article that was published on the front page of the Wall Street Journal emphasized that returns were flatbed due to the fact that investors were concerned of the possible on set of inflation. If these concerns a re warranted and inflation is thus expected, the Bull market may very well be over. This after all makes sense, inflation has slowed and stopped many run-ups in the past, and the onset of inflation now could very well do the same. While the article introduced some possibilities, it said nothing of the likelihood, the causes of, the Fed.s reactions to, and the probability of expected inflationary increases in the future. This paper is thus dedicated to expanding on these ideas by exploring the rationality of these concerns by examining the circumstances skirt inflation. It is my speculation that the Bull market may eventually correct itself in the future, but not in the short term due to immediate inflation. That is, that the market was in fact flat due investors concerns, but actual imperative inflation does not look to be expected in the near future. In order to begin to understand the nature of market trends and forces, one must first consider the current state of the U.S. econom y relative to its business cycle. trusted aggregates can be measured that tell us a great deal about this. These aggregates have a strong history of leading, coinciding, or lag the relative business cycle with a high amount of regular correlation. Appendix 2a contains illustrations, which show graphically the trends of the leading, lagging, and coincident indicators over the past few years. These graphs are composites of each group, and upon examination it is clear that all the indicators are rising.