Weekly review for week ending 18th June 2010
by Raymond Chatlani Investment Analyst
On Monday, France announced a three-year budget plan aimed at bringing France's budget deficit down to 3% of GDP by 2013. This would be done by cutting the public deficit by 100 million Euro over the next 4 years. Also EU industrial production grew by 0.8% over the quarter. After european stockmarkets closed up, US markets and latin american indices lost all their gains by the end of their session as Greek debt was downgraded to junk status by Moody's.
On Wednesday, US data on showed that housing starts fell in May to their lowest level in five months.This shows that the USA economic recovery is modest and uneven.
On Thursday, the US Government reported that new claims for unemployment benefits rose unexpectedly last week. This had a positive effect on world markets.
With very little news this week, investors focused mainly on Europe's debt problems especially Spain. Fears of potential banks' losses on european loans, particularly from Spain's collapsed housing boom which sent the Spanish Government's borrowing costs to a record high. Thursday's Spanish Government's bond issue was successful and was oversubscribed. This calmed investors and stockmarkets recovered towards the end of the week. Consequently gold was also a beneficiary this week as investors seeked safe havens due to both the greek debt downgrade and fears of a failed Spanish bond auction. Gold hit a new high today of $1,260 an ounce.
Overall markets were positive again this week. Asian markets are still booming, the US economy is growing slowly and unevenly and it seems that there will hardly be any growth in Europe. There is still no clear trend as to whether we are still in a bull market rally.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment