Jim Cramer, the manic presenter of the Mad Money show on CNBC, and founder of TheStreet.com, is bullish. The Dow Jones and the S&P 500 are making record highs, he notes, and if you look at the charts of most major stocks, "you will see an explosion of direction changes", due to "short sellers covering positions that have gone awry". This is partly because a more optimistic view of economic growth is taking hold in the US, as investors grow less concerned about the Federal Reserve crushing the rally.
Another factor is the appearance of "major reversals" in various sectors. For example, up until a few weeks ago, everyone believed we had reached "peak car" and that demand was set to fall. However, "Hurricane Harvey has destroyed huge numbers of insured cars which will need to be replaced". Similarly, the devastation of Hurricane Irma will boost construction companies at a time when many people felt that "the housing cycle was finished". Higher interest rates should also help banks.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
How does the Lifetime ISA work? Key LISA rulesWhat is a Lifetime ISA (LISA) and how much could the government bonus boost your savings by? We look at the perks and the pitfalls.
-
AJ Bell: a fine British fintech going cheapOpinion Don’t overlook investment platform AJ Bell, a significantly undervalued British business with an excellent financial base
