I RECENTLY wrote a news analysis to suggest that the stock market might enjoy better tidings, after the beating it had taken last year.
It is a controversial view, given the deepening economic gloom which we are confronted with. Indeed, it is difficult to find anything to cheer about. The Singapore economy is contracting and more people are likely to lose their jobs in the month ahead.
Since the news analysis was published on Wednesday, the Straits Times Index had fallen two days in a row – a sign perhaps that I might have been premature in my optimism.
But I am still convinced that I will be proven right eventually.
As noted in the news analysis, there is a Chinese proverb suggesting that if the year has a great start, everything will proceed smoothly.
Well, I do admit that the sailing on the market has been less smooth this week, with STI losing much of the 9.2 per cent gain which it had made in the first two trading days of the year.
But the newsflow had so far not been as awful as January last year, when it literally rained bad news every day.
I am also hopeful that the December job data in the United States, due to be released tonight, will turn out to be less awful than what many economists have been making it out to be.
Expectations have been so beaten down so much that any positive surprises on the US job data may provide a further catalyst for stock prices to climb.
For the past four years, I had found myself contributing articles to the front-cover of The Straits Times on the first trading week of the year.
2006 and 2007 had turned out to be excellent years, as markets fired on all cylinders and stock prices soared to record highs.
2008, by contrast, had been awful. In January alone, I wrote two front-page stories featuring the collapse of regional markets and the failure of the US Federal Reserve to calm a global financial storm, despite making a major interest rates cut.
It presaged a storm which was so overpowering that it sank major firms like Lehman Brothers and American International Group.
This year, I again wrote a front-page story on Monday when markets kicked off trading for the first full week of the year. It featured the hopes which had inspired stock prices to rally.
Indeed, hope will be the rallying cry in the months ahead, as investors look to US President-elect Barack Obama and their own governments to come up with pain-relieving measures to alleviate the job losses and the pay cuts which many of them will be experiencing.
And it is this hope that leads me to believe that 2009 will end on a positive note for the stock market.
When we buy into equities now, we are buying into a hope that we will finally put the worst behind us.
Hope springs eternal in the stock market, as the Year of the Ox approaches.