Worst U.S. Economic Month in Decades; Signs of Upward Trend

Friday officially capped the worst economic month in the United Stated in 21 years. According to an article in Marketwatch entitled: "Stocks rise for second day as credit markets thaw,"

The end of Friday's session markets the worst month for the market since 1987. The Dow was down 14.1% for the month – and "All but seven of the blue-chip index's 30 components ended in the black."  According to the Emerginvest Heat Map, most of the world (except a few places like Tanzania) is deep red for the month.

Despite the awful performance for the month, the market jumped sizably for the week. According to the Marketwatch article, the Dow soared "11.3% for the week," diminishing the exorbitant losses that occurred over the month. The credit markets which are loosening up are helping equity markets rebound after a slew of horrendous quarterly reports which helped pound away at the markets (alongside fears of recession and slowing global growth).

Although despite the U.S. market's performance in the last month, there are signs of a surge upwards. Asian markets had a formidable day Monday as the Hang Seng rose 5.3% and India's SENSEX rose 5.1%. According to another Marketwatch article: "Hong Kong, Mumbai pace gains in regional rally," the

Mumbai-listed stocks surged in early trading after the Reserve Bank of India cut interest rates over the weekend, while lenders such as Westpac Banking Corp. were also aided by hopes the Australian central bank may cut interest rates on Tuesday.

Whether the Asian markets represent a possible positive day for the U.S. is yet to be seen, but given the recent upward trend of the last few days, there is strong evidence it will continue. While volatility in world markets persists, it is hard to imagine another month as bad as September or October in the near future. Regardless of the medium term, the recent upward surge represents a much-welcomed respite from one of the most horrendous months on record.

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Comments

[Steven Hansen:]

i can imagine almost anything. we can change your headline to read "stocks surge on recession confirmation and terrible consumer credit". Next the unemployment numbers will fall, and the stocks nosedive.

yes, we have entered bizarro world.

2008 Nov 03 05:07 AM

[investor88:]

Have to agree that there are signs of uptrend, a tradeable rally. I would adopt a stop loss/sell stop strategy when entering the market.

2008 Nov 03 06:56 AM

[Smarty_Pants:]

"Upward Trend" may be a bit on the optimistic side. 'Tradeable bounce' would be more appropriate.

2008 Nov 03 10:10 AM