Every silver lining has a cloud
Share markets staged something of a recovery yesterday following news from the US of stranger than expected housing sales in February, and JP Morgan's decision to increase its offer for investment bank Bear Stearns from $2.52 to $10 per share. The local S&P/ASX200 index jumped 3.72 per cent to 5318.4 while Wall Street and Asian markets also received a boost. Analysts are warning investors that the recovery could be short lived though and any further bad data could see any gains wiped out. Senior strategist at TD Securities, Joshua Williamson said that markets had become so pessimistic that yesterday's surge could be an overreaction to some good news. "I think the US economy has some significant pain to go through yet and there's further sub-prime-based writedowns and losses that need to be acknowledged by banks and major corporations and that's going to have an impact on the market."
Source: The Daily Telegraph