The bear market of 2002 is over and 2003 should herald a recovery in battered stock markets, one of Ireland's leading fund managers claimed today.
In a newsletter to clients, Mr Noel O'Halloran, chief investment officer at KBC Asset Management, said: "Based on financial and economic indices it is our view that the 9th of October was the day that global markets finally turned.
"Though we can still expect volatility and down days in the markets all the evidence suggests that the bear market is over and that it is likely to be followed by a 'Santa Claus' rally and then by the now-traditional January rally as new monies are invested at the beginning of a new investment year".
Mr O'Halloran said: "In October, there was a stream of awful economic numbers coming from the US . . . additionally, broking analysts downgraded earnings estimates at the fastest pace since last year's recession. But, markets rallied despite all of these negatives. This was the sign investors had been looking for".
He noted the recent Wall Street rally has been broad based, having moved from defensive stocks such as utilities to more economically sensitive stocks - such as retailers - as confidence grows about the future.
October 9th was also the day that the spread between US Treasuries and corporate bonds peaked at a 20-year high and at the second-highest level in 50 years. The previous peak was in October 1982, two months after the beginning of the greatest bull market in stock market history.
Mr O'Halloran also cited the rebound in the commodities as a leading indicator that industrial activity is picking up.