Current Asian stock markets having experienced their worst six months since 2000, it is tempting to think things cannot get much worse. But, while a summer rally is likely, I just think the bear market is far from over. Too many headwinds are pushing Asia back: rising inflation, the risk of the Fed tightening, political upheaval, and continued foreign selling. The next set of worries may come from the corporate sector: margin pressure and higher interest rates mean analysts’ forecasts of 6% EPS growth this year and (especially) 15% in 2009 look pie-in-the-sky. I see markets continuing to drift off until early 2009 at least... or more? *sigh*
Next question: Is there no sunshine after the rain?
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