Weekly Market Summary

by Raymond Chatlani

Global stockmarkets and commodities rocketed higher last week after the Federal Reserve announced on Wednesday that it would use $600 Billion over the next eight months ($75 Billion a month) to purchase medium term treasuries to keep interest rates low for the forseeable future. It looks like emerging markets and commodities will continue to appreciate over the next 12 months as this liquidity will probably enter these areas as investors continue to seek higher returns.

On Monday, Asian stocks closed mostly up as traders welcomed better than expected jobs data out of the United States on friday while sentiment was still up after the Federal Reserve's huge stimulus plan announced last week. European markets closed modestly down on Sovereign debt concerns as fears that nations will have difficulty cutting deficits resurfaced, while commodities slid on a strenghtening US Dollar. US stocks were dented by a stronger dollar. Gold climbed to an all-time record high for a third running day, powered by worries over Ireland's debt.

On Tuesday, gold hit a new high of $1,421 an ounce while silver appreciated to over $28 an ounce on eurozone debt fears. Asian stockmarkets mostly fell on profit taking after large gains last week. European shares rose on corporate results and miners as commodities recovered. Wall street fell on a stronger US Dollar as traders pared positions and booked some profits. Commodities all fell with gold falling below $1,400 an ounce and silver below $28 an ounce.

On Wednesday, Asian markets closed mixed with China, Hong Kong, India and Australia falling while Japan, Indonesia and South Korea all rose. European stocks fell as investors -- betting that the country soon could join Greece in seeking a bailout from the European Union -- drove the interest rate on the country's 10-year borrowing to a new high. today. US markets fell inspite of an unexpected drop in first-time claims for unemployment benefits as normally an upbeat jobs report would be enough to send stocks higher. Instead investors are focusing on an upcoming meeting of world leaders and as Europe continues to grapple with government debt problems.

This week, markets and commodities gave up some gains as the US Dollar strenghtened. Investors are also scared that a new debt crisis is brewing in Europe, especially in Ireland. Also, this week's meeting of the G20 is not going well with Governments' disagreeing as to what action to take to aid the global economy. The G20 statement will be released at the end of their meeting this Friday.

Could this be the start of a bear market? If there is a serious credit crisis in Europe, then it could materalise, but It is very doubtful as the Greeks were in a worse position in spring. Also, the markets have run up too fast over the past two months and a period of consolidation is required.