Weekly Market Summary

by Raymond Chatlani

With the Japanese stockmarket closed on Monday, Asian equities were mixed as investors wait for the FEDS statement on the US economy on Tuesday. European markets extended gains after US shares rose on a report showing that U.S. homebuilder sentiment unexpectedly held steady in September. US indices closed over 1% higher as investors expect the Feds on Tuesday to state that more quantitive easing may be forthcoming if necessary.

On Tuesday, Asian markets rose modestly following the US markets. EU indices closed mixed although Irish, Spanish and Greek Government bond issues were all successful. Consequently, the Euro climbed strongly against the US Dollar. US stockmarkets were flat although housing starts in August rose more than expected. The U.S. Federal Reserve announced that it was ready to provide more support for the economy and expressed stronger concerns about low inflation, while keeping interest rates on hold and not offering a timetable for when it might provide that support. Investors heard what they wanted but did not push US indices higher. It seems that they are waiting to see if further quantitive easing actually occurs. Gold hit a new high of $1,290 an ounce.

On Wednesday, Asian stocks were mixed in thin trade as markets were closed for holidays in South Korea, mainland China and Taiwan. The FTSE 100 fell on speculation over government plans to introduce a new bank windfall tax which hit financials. EU markets fell also. Gold hit a new record high of $1,295 an ounce as the US Dollar tanked against the Euro. US indices fell as some technology companies slumped and the Federal Reserve's downbeat assesment of the U.S. economy weighed on sentiment. Investors are realizing things will have to deteriorate first in the economy before the Fed is going to intervene.

On Thursday, Asian markets that were open fell modestly in thin trade as major markets in Japan, mainland China, Hong Kong and South Korea were closed for holidays. European and US indices fell as investors worried about growth prospects in the developed world as a surprise contraction in Ireland's GDP and news that US unemployment claims climbed and that sales of previously-owned homes in the US rose to a 4.13m annual pace in the month, second lowest only to July which was the worst in a decade's worth of figures from the National Association of Realtors.

This morning, Asian stockmarkets were mixed on the back of US unemployment figures providing evidence of a poor recovery in the world's biggest economy. Gold hit an all time high of $1,299.95 an ounce before pulling back slightly while silver rose to a thirty year high of $21.37 an ounce. European markets rose upon US macro data after opening flat during the day. US shares rallied almost 2 percent as demand for American capital equipment rebounded and German business confidence improved. Growth in orders for US durable goods excluding transportation equipment grew 2 percent while German business confidence unexpectedly rose to the highest level in more than three years.

This week economic data has again improved and the US Federal Reserve's implied action of quantitive easing has contributed to emerging markets gains. Today's improvement in US durable goods orders may be a significant event as it implies that US companies are now spending and investing to grow their business. While we are still seeing the western economies of the USA, EU, UK and Japan struggling to grow as unemployment and housing still remain weak, emerging markets and commodities are taking off. Our recent changes to be more aggressive and invest into emerging markets is working. As long as the developed economies do not go into another recession, then we should see further gains.