Stocks traded higher on Tuesday, as Federal Reserve Chairman Ben Bernanke gave investors some hope. The Dow Jones Inudstrial Average shot up 236.16 points (3.32%) and the S&P 500 also climbed 29.81 points (4.01%).
Bernanke made a bold prediction that the recession will at the end of this year. Although he said the economy will continue to contract for the first six months of 2009, investors were very excited about his optimistic prediction for the end of 2009. Investors are also highly anticipating Obama’s speech on how he plans on stabilizing the financial system and his plans on further stimulating the economy. Wall Street will be looking for specific details in Obama’s speech, and if investors are happy with the details, the markets could continue to push upward from their multi-year lows.
The economy is still very shaky, and today’s upward movement in the markets were mostly due to a prediction by the Fed Chairman, anticipation over Obama’s speech scheduled for tonight, and some investors taking advantage of stocks that have possibly been oversold. Until the markets go higher based on concrete positive economic news, the stock market fluctuations will continue to be very unstable and volatile.
Obama’s speech tonight should be very interesting, and the markets tomorrow will definitely reflect what investors thought of his speech in terms of how specific it was and whether his detailed plans will actually be positive and help stimulate the economy and the financial system. So, definitely try to watch the speech tonight and decide whether or not you think he does a good job of instilling hope through specific plans.
Until tomorrow,
Niki Pezeshki
College Trillionaire
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