Hollingsworth Weekly Market Summary

Last week, global markets fell due to poor labour data and regional manufacturing reports in the USA which indicated that the economy is slowing. Investors are not happy with the data coming out of the USA and are concerned that a double dip is on the horizon.

On Monday, Asian stocks were mixed after the large falls last week. European markets rose boosted by merger and acquisition news and on gains in the mining sector on hopes a planned Australian mining tax could be scrapped. US indices finished lower on lingering worries over the economy.

On Tuesday, Asian markets retreated as investors anticipated more bad news from US reports this week. European and US stocks fell sharply following dismal US housing data and fears of a recession in the UK economy. Existing home sales fell 27 percent during July which was the largest monthly drop in the four decades that records have been kept. Together with last weeks poor labour data, investors are concerned that the US economy may be facing a double dip recession. Metals fell sharply and crude oil dropped to $72 a barrel on the uncertain economic recovery while US treasuries gold appreciated as investors sought safety.

On Wednesday, Asian indices followed global indices down as investors pared risk on poor US housing data and slowing Japanese exports due to a stronger yen. European markets fell as Ireland’s credit rating was cut one step by Standard & Poor’s to AA-, the lowest since 1995, on concern the rising cost of supporting the country’s struggling banks will swell the budget deficit. U.S. stocks staged a comeback on bargain hunting after suffering steep early losses on disappointing data after the Commerce Department reported that durable goods orders rose only 0.3 percent last month, much worse than the 2.8 percent growth forecast and that new home sales fell in July to their lowest rate since records from 1963. Buying interest picked up at the end of the session as traders hunted for beaten down stocks.

On Thursday, most Asian stocks rose snapping a lengthy losing streak, but gains were modest as they followed the rebound in US markets. European indices rose as a batch of strong corporate results offset investors' worries over the economic outlook. US markets fell although the Labour department said that claims for unemployment benefits fell to 473,000 last week after climbing to over 500,000 the week before as such jobless claims figures are still considered as being too high.

Asian stocks were mixed on Friday on optimism that the Japanese Government would be doing something to stop the yen from appreciating and persistent worries over whether the U.S. economy may suffer another recession kept investors dour. European indices were up after US second quarter GDP data was reported at 1.6%, slightly above the 1.4% growth that was expected but turned negative in the afternoon after Federal Reserve chairman Bernanke's remarks about the weak US economy.. US markets opened higher after Federal Reserve chairman Bernanke stated that the Fed will consider making further large-scale purchase of securities if the slowing economy were to deteriorate significantly and signs of deflation were to flare, although the FED chief stopped short of committing to any specific action.

Global markets fell sharply this week on very weak housing data in the USA, slowing Japanese exports due to a strengthening Yen, fears of recession in the UK, slowing EU and Chinese economy and fears of a double dip recession in the USA as second quarter GDP growth came in at only 1.6% after growing 3.7% over the first quarter.

The deteriorating data that we have seen this week confirms that it is still too risky to buy stocks. Until we see an improvement in the housing sector and better employment figures it will be difficult for these markets to takeoff.