After sunshine comes rain

After the last weeks sunshine over stocks known as a bear market rally, it seems like it has come to an end. According to Morgan Stanley we are in for some rain, but not as much as in March. What we have seen since the bottom in late January is the so called "Fase 1" in the stock business cycle. We have seen the usual bear market rally driven by interest rate reductions. People tend to forget all the larger problems around them and focus on the interest rate which now is probable the have hit its lowest point for a while. This will result in the next fase, which is the fase when people realise that the economy isn't as healthy as they though. Of course it is different from decline to decline, but this time it is the earnings that are the interesting part. The market is focusing on the oil price at this very moment, but as soon as Q2 sets in, I am certain that the eye will concentrate more on the falling earnings than the northgoing oil.