End of global turmoil? Mark Faber, Mobius speak

Excerpts from Power Breakfast on CNBC-TV18 Watch the full show » RELATED NEWS Marc Faber positive on Indian realty in long-term ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets Nifty BSE | NSE 25/05/12 Are Mutual Funds betting on Nifty?

It was a historic day for Wall Street. Stocks bounced back from their worst week ever with one of their best performances as investors cheered the government plan to buy stakes in banks and a Federal Reserve led push to flood the global financial system with dollars. The Dow posted its biggest ever point gain and the markets rallied the most since 1930.

The Dow Jones snapped an eight-day losing streak, gaining 11 percent, to close at 9,387. The Nasdaq put on nearly 12% and the broader S&P 500 index was up 11.5%.

 

The Dow snapped an eight-day losing streak, gaining 936 points. Asian markets are also in celebration mode.

 

So have global markets finally bottomed out?  Here are a few experts on the road ahead for US markets.

 

Marc Faber, Editor and Publisher, The Gloom, Boom & Doom Report said, "Maybe the worst of the financial crisis has been seen, but I will give you an example, General Motors was at USD 94 in 1999. Yesterday, it rallied 33% but it's still at USD 6. People say the market has rallied 10% and stocks like Morgan Stanley went up 86 %, but they are still way below the previous peaks and losses are colossal in the investment community."

 

"We have to see the rally in the context of everything, the market was already oversold when it was at 1200 and then it went down to 831 on the S&P and became statistically unbelievably oversold. It was probably the most oversold condition ever. Now we have a rebound and these rebounds can be in the order of 20%-30% and then traditionally usually you have a retest of the lows. I am not saying the lows will be retested. But usually there is a retest of the lows."

 

On gold he said, "Gold price could easily drop to USD 700 per ounce before it enters into a rise but one will see much higher gold prices eventually because paper money is over time losing its purchasing powers in the world. It's very clear that every currency is losing its purchasing power in the world.

 

Mark Mobius, MD, Templeton Asset Management said, "There will certainly be a lot of retrenchment in the real economy. But the stock market tends to look ahead. And therefore we have seen these big declines in the market. You will see a few more declines but we are beginning to see a bottom and therefore the opportunities are quite interesting, quite attractive."

David Darst, Global Wealth Management, Morgan Stanley said, "We need confidence to return, people need to have faith and trust the prices on the balance sheet. And they have to have faith and trust in the management. Supremely and most importantly they have to have faith and trust in the authorities. All these authorities are working together and that is definitely helping to restore the confidence a bit.

 

"The upward market movement was a combination of three things. It was global, it was coordinated and it was systemically directed as opposed to ad-hoc. Some of the actions UK has sparked and motivated and inspired others. In turn some of the US programs have done that for European nations and this has led everyone in their own independent way to fall into the parade and act together."