Weekly Market Review

by Raymond Chatlani

On Monday, Asian stocks rose amid investor hopes for more Federal Reserve action to boost the U.S. economy, although the Nikkei fell modestly due to pressure on Japanese shares from a stronger yen. European stockmarkets closed mixed with banks falling and oil shares rising. US markets fell modestly with investors taking profits and looking for further action from European officials to prevent a debt crisis from spreading. Gold temporarily hit a record high of $1,429.40 an ounce with silver reaching a thirty year high.

On Tuesday, Asian stockmarkets all rose except for Japan due to a strengthening Yen and India. European and US stocks rose due to the agreement by President Obama and Republicans to extend the Bush-era tax cuts for two years, along with an extension of unemployment benefits and a 2% cut in payroll taxes.

On Wednesday, Asian markets mostly fell amid expectations of Chinese interest rate hikes. European stockmarkets closed mixed. US stocks rose as much of the focus remained on President Obama's decision to help middle class Americans with the two-year tax cut extension.

On Thursday, Asian equities were higher across much of the region with Sydney hitting a four-week high on strong employment data while a weaker yen overnight continued to boost Japanese shares. European markets rose boosted by technology and bank shares. US Stocks closed mixed as traders waited to see whether a tax compromise brokered by the White House and Republicans would pass the Democratic-controlled House.

This morning, Asian indices were mostly down on profit taking. European stocks rose modestly on easing sovereign concerns. US markets are modestly down at the time of writing.

This week European and US markets rose as debt concerns eased and on improving US economic data. Commodities and emerging markets lost some ground this week on fears that China will raise interest rates this weekend.


Perhaps the most important event this week is that bond yields are appreciating which is decimating the price of bonds. As investors flee, where will this money go? Cash has almost no return, so stocks could benefit over the next few months. Also, volatility has been tame this week compared to the last few months. This is generally a good sign for markets to appreciate.