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  • March 13, 2009 09:50 AM EDT by Cheryl Casone

    Market Rally: Real or Fake?

    We are debating that topic on today's show.  The sentiment and the fear out there is skewing so negative, that even with a four day rally, the skeptics believe this is a fake bear market rally that will not last.
    Believe me, I have no interest in making a prediction or  a bet, because I've called the markets and certain stocks the wrong way in the past.  But, no matter who you listen to, or what you read, you cannot honestly believe that the Dow, Nasdaq, or S and P are going to zero.  That thought has been put out there.  Investors are ditching equities, and going for bonds and commodities.

    Peter Boockvar at Miller Tabak told me that when you see a commodity rally, that will be  a signal that stocks will soon follow.  At least commodities are a real tangible asset.  But I believe a stock is also a tangible asset of value, and I know that barring a bankruptcy filing by Citigroup for instance (I don't know anything, just an example) that these are companies with real lines of business, real customer accounts, and real growth potential.

    One analyst called for a 12 month price of $3.50 for  a share of Citigroup.  So I wouldn't run out and buy it, but a financial ETF? I would do that.  When the banks begin to come back, and you see a modest uptick in commodity prices, you are on to something, and we'll begin the trend upward.

    CC

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Paledude

The market will move for a while (9,000) until the new wave of forclosures hit caused by job losses and then we might find a new low. Commodities are sneaking up again and inflation will raise it's ugly head once all this money hits the system.

March 17, 2009 at 7:17 pm

Brian

I don't believe the Dow is going to zero, but what I do believe is that it will take years - just as it did after the Depression - to restore individual investor confidence in the markets. An upturn in bank stocks and commodities won't do it. The market is up today, I see. To me, this means that institutional investors just can't wait to lose more money. They've got all this money (minus the $trillions they've lost), and they have to "do something with it". After all, that's why they go to work every day, right? That's what they DO. And interest-bearing instruments are paying nothing, so - gotta jump back into the equities market! Hey - housing starts are up...let's throw away some more money on that bit of news! The underpinnings of our economic problems (mortgages) have not changed a bit, and the economy has lost enormous wealth it will never get back. Despite this, a lot of "market-makers" act like, well on Friday the economy was crap but suddenly on Monday it's turned to gold. Hullo? This is just like you folks on financial TV shows trying to figure out whether an up-day or two means "we've hit the bottom". L O S E R S.

March 17, 2009 at 11:52 am

Perry Devlin

I've grown to distrust the federal government and the stock market lately. I got out of equities when Bear Sterns got into trouble, only to have the Treasury intervene over the weekend causing a rally in the market. I've made other trades based on what should have happened, only to have Govt. intervention move the market the other direction. Now, I'm concerned that Geithner, having spent most of his adult life in and around the stock market, may be using the stimulus money to manipulate the market in order to build some positive momentum in the market, or to stabilize it. After all, that's really all he knows, right? What do you think? I presume he could do so based on the vague rules surrounding the implimentation of funds. I feel we've all been manipulated and betrayed, and don't want to fall back into gambling in a market that has no bearing on what's really going on.

March 15, 2009 at 8:06 pm

Cats

I have no more idea about the next market move than does anyone else. Even though I'm a "senior citizen", I take somewhat of a long term view because I suspect I could live for another 20 + or - years and I want to be sure I have enough money when the "grim reaper" finally calls. I also have an abiding faith in the U.S. economic system and want to participate in it's growth.

March 15, 2009 at 4:30 pm

Kevin

I'm in agreement with you about the rally. Oil is up over 10% from it's monthly low (~$40). That's good, even though I won't like seeing pump prices rise. As long as the banks keep making profits (however large or small they are), that will be a positive and those positives could slowly add up.

March 13, 2009 at 12:27 pm

Michael

Fake, we have not hit bottom in the economy. Until we see the bottom nothing on Wall Street is real.

March 13, 2009 at 12:08 pm

about this blog

  • Cheryl Casone joined FOX Business Network (FBN) in September 2007 as an anchor. Prior to FBN, Casone served as a correspondent for FOX News Channel’s (FNC) business unit and was a regular guest on FNC’s Your World with Neil Cavuto. Casone brings years of experience covering finance, business, and consumer news to FBN.

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