Winds of Optimisms Gradually Returned?

On Friday, Dow Jones went up by 1.81% with supporting better than expected financial results from Google Inc, the internet giant, and Caterpillar. However, this came about despite the worse than expected results posted by one of the world's largest banking group, the Citigroup. In the normal circumstances, any unexpected surprises, especially in the financial sector, would normally trigger off a knee-jerk reaction but not this time.... So, what's the telling story this time? Well, apparently some smart investors and/or analysts in the street decided that they had enough bad news coming from the financial sector and perhaps it's time to blow some trumpets instead of being kept too long in sorrows.....Citigroup posted a $5.11 billion quarterly loss and said it will cut jobs to drive down expenses....Investors welcomed its efforts and therefore decided to restore some luster to a stock that has fallen by about half over the last one year!

Sounds convincing? I am not sure about that! However, what does seem encouraging is that corporate (other than financials) performance have not been adversely hit so far, with only a handful like Oracle Corporation and GE not meeting expectations and cutting forecasts. This could well be a confirmation that for the globalized multi-national US Corporations, the effect of a slowdown in the US economy and the softening US Dollar have been offset by strong overseas operations and the conversion of overseas profits into greenbacks.

From a technical perspective, it also appears to me that 11,634 appears to be the bottom of the Dow's down swing. Perhaps it is a positive sign that the worst is over! However, it does not mean that the US credit and financial crisis have run out of bad news. The main difference this time is that there is better anticipation and preparation for the worst.