Market UP on hopes recession ends this year

This morning Bernanke told Congress the “recession might end this year” and that the banks may not be nationalized. The news brought relief to many investors worrying about the banking industry and helped lift the Dow and SP500 this morning from their Monday lows. Investors are also patiently awaiting Obama’s speech this evening hoping he will provide details on his plan to stabilize and stimulate the economy. And how exactly he plans to repair the banking system without bank nationalization. Oh and nevermind Obama’s fleet of 28 new Marine One helicopters that will cost almost $11.2 billion. I imagine after being slammed for this one by McCain he will have some explaining to do.

Just checking in on the two companies I wrote about yesterday…McDonald’s (MCD) is up today almost 2% but still not breaking that 55 mark. And Starbucks (SBUX) is up today over 4%. Like I said yesterday, I really think their is more room for movement with Starbucks. See my last post to see what I’m referring too.

PredictWallStreet published several forecasts today. Of the five companies forecasted, only Wells Fargo & Co (WFC) is forecasted to close down. I want to investigate this a little further so I click on WFC to check out their sentiment and what other predictors think of WFC. Wells Fargo is up today but I made my prediction for down based on the forecast, which have been beating the market in the last year (To read how they have beat the market click here). So it looks as if 82% of predictors predicted WFC to close up today. Looking at the one month sentiment button under the Sentiment Tab shows sentiment looks pretty neutral but could possible tick up in the weeks to come. I also want to look at the Accuray>Star Performers for WFC. The 3 and 2-star predictors have predicted up while the more accurate 4-star predictors are split in their predictions. Looking at all that information, I’m going to keep my down prediction. I think WFC is up today mainly on hype of Bernankes comments and optimism that the banks won’t be nationalized. But more importantly, we’ll see how people are feeling tomorrow AFTER Obama’s speech.

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