Equity Stock Market Pullback

Equity stock market finally encounters a pullback not seen for weeks. Even the turmoil in Egypt cannot drag down market. Only when oil price surges then the effect of economy slowdown is reflected in equity stock market.

Currently market is highly manipulative by speculators. Hedge funds are finding this an opportunity to profit from market turbulence. However there is no concerted effort to drive the market in this investor group. Outlook from all market participants are still diversified. Thus there are short term fluctuations but no explicit movement direction.

This is golden chance for opportunistic traders. However, the speculation is highly risky and unpredictable. Making quick turn profit is almost a gambling based on fortune and luck. Nevertheless, the long term outlook is still optimistic regardless of temporary market turbulence. Some investors that have been waiting on the sideline are putting surplus capital and previous profits back into market. However, as observed in the past few weeks, investors are extremely cautious and not aggressive in buying. On the other hand, selling pressure is limited as there is hope that market will recover sooner or later and investors are afraid to lose the train.

This is also an opportunity for the speculative trading portfolio to apply the strategy in speculative trading and to acquire the skills by practise. Due to uncertainty in current market environment, for safe play it would be most desirable to maintain enough buffer for extended market headwind on unfavorable investment decisions. Because of exceptional capital liquidity and improving corporate earnings, equity stock market will maintain an upward trend despite short term turbulence. Optimistic investors are taking the opportunity in the pullback to strength the portfolio position.

Investors snap up cheap homes, new buyers miss out
Home sales are starting to tick up after the worst year in more than a decade. But the momentum is coming from cash-rich investors who are scooping up foreclosed properties at bargain prices, not first-time home-buyers who are critical for a housing recovery.

The number of first-time buyers fell last month to the lowest percentage in nearly two years, while all-cash deals have doubled and now account for one-third of sales.
Cash-only investors are most interested in properties at risk of foreclosure. They can get those at bargain-basement prices.

"The cash-rich investors can come in and get foreclosed properties at incredibly favorable prices," said Paul Dales, senior U.S. economist for Capital Economics. "The average Joe can't take advantage because they simply cannot get the credit to buy."

Foreclosures represented 37 percent of sales in January. All-cash transactions accounted for 32 percent of home sales -- twice the rate from two years ago, when the trade group began tracking these deals on a monthly basis. In places like Las Vegas and Miami, cash deals represent about half of sales.

Some Big Investors Bet on Treasury Rally
Some investors have already snapped up Treasurys in the recent selloff that had pushed the 10-year yield to a nine-month peak of 3.77% on Feb. 9. Among them is BlackRock Inc., the world's biggest asset-management firm with about $3.5 trillion in assets under management, even as the company expects Treasurys to underperform stocks and corporate bonds.

Investors Waltz On, Eye Exits
Even as they remain heavily invested in the market, many investors are wary about what happens next. The recovery in the economy and stocks has been fueled to a large degree by unusually aggressive government support. As a result, investors are worried about the ultimate cost of ending the crisis, including what will happen when government support begins to wane in a few months.

"Real activity is recovering, and people's willingness to take risk seems to have increased," says Raghuram Rajan, a finance professor at the University of Chicago Booth School of Business. "Does that mean we have come back to normalcy? Are things hunky-dory? The answer is no."

Many investors, both professional and individual, are staying in the market, continuing to ride the stock gains, even if they remain skeptical of the rally's longevity.

Wall Street coffers are as full as ever. Bankers enjoyed a record year for compensation in 2010. BlackRock Inc. (NYSE: BLK - News), the world's biggest money manager, saw its net profit in the fourth quarter of 2010 double from a year earlier.

More than $24 billion has flowed from U.S. investors into stock mutual funds in the past five weeks, the strongest such period since early 2007, according to data from the Investment Company Institute.

In sign of growth, businesses are borrowing again
Now that demand is up and business is finally improving for many companies, they're doing what they always do at the beginning of an expansion -- calling the bank and asking for a loan.

Spending Showdown: Hubbard Sees Budget Solutions, “But We Have to Act Now”
“We could do it gradually, and we could make sure that no body but upper middle income and higher income people feel the pain,” he says. “We can do that, but we have to act now.”