Analysts Believe the Rally Will Continue
Place your bets investors, the talking heads along with the media are saying stocks can go higher, just take this article from Reuters on a 'mood shift post Lehman Brothers' as fuel to the fire.
Best of luck trading this coming week, enjoy the article -- NEW YORK (Reuters) - U.S. stocks are poised to repeat their advance this week as investors bet that the economic recovery is gaining strength and company outlooks are turning rosier.
Despite the anniversary this week of Lehman Brothers Holdings' collapse and the tumult that subsequently rocked Wall Street, the mood in the market is likely to be more optimistic than gloomy.
A year ago, it seemed as if the financial world was coming to an end when Lehman, a 158-year-old trading company and parent of what had been the fourth-largest U.S. investment bank, filed for bankruptcy on September 15, setting off a scramble by authorities to avert global financial meltdown.
But fast forward to September 2009, U.S. stocks are at new 12-month highs, and if this week's economic reports show that the recession continues to abate, U.S. stocks should extend their run-up.
"The market is still in the process of pricing in an economic recovery," said Sean Clark, chief investment officer at Philadelphia-based Clark Capital Management.
"We think we're going to see 3.0 percent economic growth in the second half of this year. As we look out into the future, I think third-quarter earnings are going to be better than expected and, based on improving economic conditions, we'll start seeing top-line growth."
Indeed, in recent days there have been increasing signs that corporate profits are improving after FedEx Corp (FDX.N) and Procter & Gamble (PG.N) joined other bellwethers in giving upbeat financial outlooks last week.
There could yet be more companies this week that offer welcome news in their outlooks.
"The earnings pre-announcements are going to be important because to sustain any move beyond where we are, we have to have pretty decent earnings growth in 2010," said Gail Dudack, chief investment strategist at Dudack Research Group in New York.
On the economic front, August retail sales, due on Tuesday, along with the Producer Price Index and a reading on July business inventories, will command attention. Data on New York state manufacturing is also due on Tuesday.
A Reuters poll of economists expects retail sales to show a gain of 2.0 percent after a slide of 0.1 percent in July. Excluding autos, the sales are projected to be up 0.4 percent, compared with a dip of 0.6 percent the prior month.
"You will get a boost to retail sales from the autos side, but we will be looking at the underlying trend of sales without autos," said John Praveen, chief investment strategist at Prudential International Investments Advisers LLC in Newark, New Jersey. "If there's any improvement, that should give a gauge of recovery in consumer spending."
Data on the Consumer Price Index and industrial production in August are due on Wednesday.
Releases on August housing starts, a weekly report on initial jobless claims and a survey of factory activity in the U.S. mid-Atlantic region are scheduled on Thursday.