Wall Street Headed for a Repeat of 1987

In the asset classes, health care, higher education and service industries the inflation is almost to the point of hyperinflation while at the same time the working economy is stagnate and there hasn't been many new entrepreneurial adventures. On top of it all retail sales are up and shoppers are having more confidence which is making the Fed very uneasy.

In early 2007 there is a chance that the Fed may raise rates. However, the Fed is merely looking at inflation and not at the huge gap that exists between the rich and the middle class. Many wonder if the stock market is going to be able to handle any more of these rate hikes by the Fed.

On January 2, 2007 the answer will be found. Wall Street will have the big players and they will set the yearly trend. If the stock market must go lower then there will be a slower version of the fall seen in 1987.

However, as the year came to a close Wall Street seen a rebound with investors encouraged by the lower oil prices. After three straight down sessions on Wall Street this rebound is a good sign of what may come in the new year.