Weekly Market Summary

by Raymond Chatlani

On Monday, Asian markets all rose except for Japan although the Chinese stock exchange will be closed all this week for public holidays. EU and UK stocks fell as German new car sales tumbled 18% in September and fears that reports this afternoon may show slowing factory orders in the USA. US indices fell as factory orders fell 0.5% in August, slightly worse than expected. The U.S. dollar gained broadly on Monday on lingering concerns about euro-zone debt especially against the Euro.

On Tuesday, weak U.S. economic indicators sent most Asian markets lower with only Indonesia, Malaysia and Japan up. Japanese indices rose 1.5% as the Yen weakened on news that the Japanese Central Bank cut rates to virtually zero would use quantitive easing by allocating 35 trillion Yen to purchase a pool of equities and bonds and broaden its loan program. Gold hit a new record high of $1,331 an ounce. European stockmarkets rose strongly on Japan's surprise rate cut and proposed cash injection into the domestic economy. US shares rocketed on Japan's announcement of quantitive easing and reports that activity in the nation’s services sector expanded for a ninth straight month during September.

On Wednesday, gold hit a new high of $1,347 an ounce. Asian stockmarkets rallied Wednesday, buoyed by growing expectations that the Federal Reserve will take steps to bolster the U.S. economy following the Bank of Japan's surprise interest rate cut. European indices rose by following Asia's buoyant mood, but pared gains in the afternoon on US job market reports. US stocks closed mixed with the Dow Jones up and the Nasdaq down and S & P 500 flat after a disappointing report that private employers recruited less staff than expected renewed concern about the health of the economy.

On Thursday, gold hit a new record high of $1,3660 an ounce with silver hitting a new 30 year high of over $23 an ounce. Asian indices were modestly down except for Indonesia which fell over 1% as investors digested the yen's overnight climb to a new 15-year high against the dollar and a disappointing U.S. jobs report. European stocks rose on good US data except for the ETSE100 and Ireland as irish debt was downgraded. US shares initally rose on reports that applications for unemployment benefits fell last week for the fourth time in five weeks, a sign that layoffs are declining and that September sales results were better than expected, but closed flat as traders opted for caution ahead of Friday's employment report from the Labor Department, the most crucial piece of news on the economic calendar this week. Gold pulled back to S1,335 on profit taking.

Today, Asian indices were mostly lower except for China and Hong Kong as investors pared bets ahead of a key U.S. jobs report later in the day and the yen traded at a 15-year high against the dollar. Shares in China jumped as investors playing catch-up as financial markets reopened after the weeklong National Day holidays and after Moody’s Investors Service said it may raise the nation’s debt rating and retail sales surged during a five-day public holiday. European stocks were mostly down as traders pared back positions before the US jobs report later today. US stocks are flat although employers in America cut more jobs than forecast in September.

At the beginning of this week global stocks surged on Japan's surprise quantitive easing and on speculation that other Governments will take additional actions to reinvigorate the global economic recovery. On Thursday and Friday, global stocks were flat as investors seem divided as to whether the Feds will execute another round of quantitive easing due to poor employment in the American economy.

Important Further Update

Further to the summary below, on Friday US markets surged by the end of the session and the Dow Jones breached an important barrier by ending above 11,000. This is an excellent signal that this rally should continue.

This morning Asian stocks rose as investors plowed cash into stocks amid expectations the U.S. Federal Reserve will take action to prevent the American economy from slipping back into recession