Bottom Shekel / A Vote of Confidence?

Six years ago, after 1,000 days of the Second Intifada and over three years of recession and losses in the markets, Benjamin Netanyahu took over as finance minister in prime minister Ariel Sharon's second government.

At TheMarker we tried to determine whether the recession had ended, even though the headlines were dire and the situation on the ground was possibly even worse. Tax revenues were falling steeply, the deficit was growing, and all around people were losing their jobs and companies were going out of business. The atmosphere was depressing, and we tried to answer one not-so-simple question: Had we turned the corner?

Today, the headlines are even blacker, but the stock market has turned optimistic and is on its way up. Yesterday the Tel Aviv Stock Exchange hit its highest level in five months as the TA-25 jumped 5.3% and the TA-100 rose 1.1%. Turnover also recovered somewhat, 40% higher than average for the past month.

The TASE has actually been on the way up for a few months. The S&P 500 is up 20% from its low of a month ago, but the TA-100 has now gained 35% after bottoming out four months ago.

One possibility for the recovery could be that the markets simply fell too far, too fast. But it is still possible the markets are hinting at what we really want to hear: The end of the economic crisis is near.

Looking back, the spring of 2003 seems a lot like the spring of 2009, and everyone is asking whether the worst is behind us. The headlines are still bleak, the job market is very weak, the atmosphere is negative - but the market is no longer at the bottom - and Netanyahu? He is back.