11:48 am November 9, 2009, by Henry Unger
Is the market getting used to the 10,000 level or is there still a good chance of a significant retreat?
On the positive side, investors appeared to take news of rising unemployment in stride.
Also, the weak dollar can help U.S. exports. And it also can boost corporate bottom lines, since repatriated overseas profits translate into more dollars.
What’s more, confidence appears to be on the upswing about a global recovery, with the Group of 20 countries agreeing to keep their stimulus measures in place.
Finally, on the bright side, there’s been lots of talk about lots of cash sitting on the sidelines, waiting to get back in.
At the same time, however, rising double-digit unemployment does not bode well for consumer incomes or spending.
Credit is still tight for many businesses and banks continue to fail.
A falling dollar can spark commodity inflation, which would dampen consumer incomes even more.
And the critical holiday-spending season is an unknown right now, again with conflicting fundamentals.
No one knows for sure, but is the stock market going to build on 10,000 as a foundation? Why or why not?
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