by Raymond Chatlani
On Monday, Asian stockmarkets with investors still nervous despite the formation of a new Greek unity government intent on avoiding imminent debt default. European markets fell as concerns shifted to Italy and whether Rome can avoid being dragged further into the euro zone debt crisis as Italian bond yields spiked to a record. Wall Street rose as European finance officials agreed to release the next slice of bailout money to Greece as long as leaders of the parties agree in writing to carry out austerity measures required by international lenders.
On Tuesday, Asian markets wiped earlier gains and fell, weighed by concerns that surging bond yields could stifle debt-ridden Italy's fund raising ability and throw the euro zone deeper into financial turmoil, while Greece struggled to pick a new leader. European stockmarkets and Wall Street rose on Italian reform hopes as Italian Prime Minister Silvio Berlusconi's resignation gave hope for a clearer path to solving the euro zone debt crisis.
On Wednesday, Asian stockmarkets rose bolstered by easing inflation in China and the euro steadied after Italian Prime Minister Silvio Berlusconi said he would resign after parliament approves a budget law that includes reforms demanded by Europe, raising hopes the debt-ridden country would proceed with reforms to contain the euro zone's sovereign debt crisis from spreading. China's annual inflation rate eased to 5.5 percent in October from 6.1 percent in September for a third straight month of decline from July's three-year peak and Premier Wen Jiabao said prices had fallen further since then. Chinese producer prices rose 5 percent in the year through October, down from a 6.5 percent rise in the year to September. European markets slumped on worries that Italy is too big to bail-out as italian bond yields surged to over 7 percent which is considered to be unsustainable. US indices fell sharply as the Eurozone debt crisis escalated.
On Thursday, Asian markets fell after soaring Italian borrowing costs stoked fears that the euro zone's third biggest economy will be forced to seek a bailout, overwhelming the bloc's finances and raising the risk of a break-up of the currency area. Most European stockmarkets fell although there was a pullback in Italian bond yields below 7 percent to 6.9 percent. Strategists said further European Central Bank buying of Italian bonds helped push down yields. Wall street rose on Italy's successful bond auction and the appointment of a new leader in Greece. Lucas Papademos, a respected former vice-president of the European Central Bank, was appointed as the new Greek interim prime minister.
On Friday, Asian stockmarkets rebounded modestly after brighter corporate news lifted U.S. stocks and debt-ladened Italy was able to fund itself at a bond auction and the naming of a new leader in Greece. European indices and US markets rose following news that the Italian parliament may well vote this same weekend on an austerity bill and that a new government may even be announced as early as this next Sunday. In fact, the country's Senate has just approved that piece of legislation and tomorrow will come the turn of the lower house.
This morning, Asian stockmarkets and the euro rose on Monday on hopes that new leaders in Italy and Greece will take decisive action to save their indebted nations from bankruptcy and fend off a wider financial meltdown in the euro zone.
Last week, global equities and commodities fell throughout the week but recovered on Friday. The markets were very volatile as the Italian and Greek governments fell and havre now been replaced with temporary coalition governments who are expected to pass the austerity measures demanded by the EU for aid to continue. In fact, Italian 10-year bond yields soared above 7 percent last week to levels seen as unsustainable. Borrowing costs of more than 7 percent have previously driven Greece, Ireland and Portugal to seek bailouts.
Investors expect the leading European benchmark indexes to rise today, extending the previous session's rally as investors bet new leaders in Italy and Greece will speed up reforms to tackle the two countries' debt problems.
Following Italian Prime Minister Silvio Berlusconi's resignation, the country's president Giorgio Napolitano asked former European Commissioner Mario Monti on Sunday to form a government to restore market confidence, and Monday's bond auction will be seen as an initial judgment on his leadership. Italy is issuing a Euro 3 Billion five year bond today which will probably be fully taken up but at rates which are expected to be above six percent.
In Greece, the new Prime Minister Lucas Papademos -- a former central banker who oversaw his country's entry to the euro zone in 2002 -- will have to win Wednesday's confidence vote in his cabinet before meeting euro zone finance ministers in Brussels on Thursday, state television reported.
The markets should continue to be volatile this week as we wait the outcome of Italian and Greek actions
Monday, November 14, 2011
Tuesday, November 8, 2011
Weekly Market Summary
by Raymond Chatlani
On Monday, Asian stockmarkets fell as the dollar spiked to a three-month high against the yen following Japan's intervention, prompting investors to book profits after last week's rally. European and US markets also fell after the Japanese government intervened overnight to cap a rising yen and as doubts grew about a deal to tackle the European debt crisis.
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On Tuesday, Asian markets fell on renewed worries about a slow progress in resolving the euro zone's debt crisis and a firmer dollar dampened investor appetite for risk. Also, China's official purchasing managers' index (PMI) fell to 50.4 in October from 51.2 in September, countering expectations for a rise. The National Bureau of Statistics blamed the drop on weak European and U.S. economies. European and US stockmarkets fell heavily on worries that a planned Greek referendum could scuttle a plan to resolve Europe's debt crisis.
On Thursday, Asian shares, the euro, commodities and the Australian dollar all fell as fears that Europe's debt crisis could unleash financial chaos prompted investors to shed riskier assets in favour of the relative safety of the dollar. European and US stockmarkets rose as Greece's government backed away from a proposed referendum on staying in the euro and a rate cut from the European Central Bank raised hopes for an easing of the region's debt crisis. The ECB cut the base rate by 0.25% to 1.25%.
On Friday, Asian stockmarkets rose and the euro steadied on hopes that Greece will abandon a proposed referendum over a euro-zone bailout but investors remained cautious over a confidence vote later in the day in the Greek parliament. European and US markets fell as richer nations appeared to back away from a European Union plan to broaden funding for a euro zone bailout fund. Also, Italian bond yields spiked higher hitting record highs of around 6.4 percent, expanding the spread of Italian 10-year yields over Bunds to a new lifetime high.
This morning, Asian stockmarkets with investors still nervous despite the formation of a new Greek unity government intent on avoiding imminent debt default.
Last week, global equities and commodities fell except for gold and oil which appreciated slightly as concerns grew over the details of a coalition deal by Greece and Italy's rising borrowing costs. The market is still filled with too many uncertainties for prices to stabilise. The rollercoaster movement of base metal prices is a sign of directionless trading. Investors are waiting to see what happens next with the euro zone crisis and China's credit situation.
Greek Prime Minister George Papandreou and opposition leader Antonis Samaras agreed on a new coalition government to approve the bailout plan, which requires painful fiscal reform, before elections. People are waiting for the situation to play out in Europe. Right now they are unwilling to put too many bets in either equities or commodities as investors remain unsure whether Greece will be able to work itself out of a debt crisis despite a weekend deal by the country's leaders aimed at implementing a controversial austerity program.
Also, a critical Italian parliament vote on Tuesday to debate austerity cuts has become a test of Prime Minister Berlusconi's government, with the opposition also preparing a motion of no confidence in the leader. The uncertainty in Rome eclipsed a political cross-party deal in Greece to approve the terms of its international bailout, although it was still short on detail.
The Greek debt crisis and the political uncertainty in Italy will continue to drive markets this week.
On Monday, Asian stockmarkets fell as the dollar spiked to a three-month high against the yen following Japan's intervention, prompting investors to book profits after last week's rally. European and US markets also fell after the Japanese government intervened overnight to cap a rising yen and as doubts grew about a deal to tackle the European debt crisis.
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On Tuesday, Asian markets fell on renewed worries about a slow progress in resolving the euro zone's debt crisis and a firmer dollar dampened investor appetite for risk. Also, China's official purchasing managers' index (PMI) fell to 50.4 in October from 51.2 in September, countering expectations for a rise. The National Bureau of Statistics blamed the drop on weak European and U.S. economies. European and US stockmarkets fell heavily on worries that a planned Greek referendum could scuttle a plan to resolve Europe's debt crisis.
On Thursday, Asian shares, the euro, commodities and the Australian dollar all fell as fears that Europe's debt crisis could unleash financial chaos prompted investors to shed riskier assets in favour of the relative safety of the dollar. European and US stockmarkets rose as Greece's government backed away from a proposed referendum on staying in the euro and a rate cut from the European Central Bank raised hopes for an easing of the region's debt crisis. The ECB cut the base rate by 0.25% to 1.25%.
On Friday, Asian stockmarkets rose and the euro steadied on hopes that Greece will abandon a proposed referendum over a euro-zone bailout but investors remained cautious over a confidence vote later in the day in the Greek parliament. European and US markets fell as richer nations appeared to back away from a European Union plan to broaden funding for a euro zone bailout fund. Also, Italian bond yields spiked higher hitting record highs of around 6.4 percent, expanding the spread of Italian 10-year yields over Bunds to a new lifetime high.
This morning, Asian stockmarkets with investors still nervous despite the formation of a new Greek unity government intent on avoiding imminent debt default.
Last week, global equities and commodities fell except for gold and oil which appreciated slightly as concerns grew over the details of a coalition deal by Greece and Italy's rising borrowing costs. The market is still filled with too many uncertainties for prices to stabilise. The rollercoaster movement of base metal prices is a sign of directionless trading. Investors are waiting to see what happens next with the euro zone crisis and China's credit situation.
Greek Prime Minister George Papandreou and opposition leader Antonis Samaras agreed on a new coalition government to approve the bailout plan, which requires painful fiscal reform, before elections. People are waiting for the situation to play out in Europe. Right now they are unwilling to put too many bets in either equities or commodities as investors remain unsure whether Greece will be able to work itself out of a debt crisis despite a weekend deal by the country's leaders aimed at implementing a controversial austerity program.
Also, a critical Italian parliament vote on Tuesday to debate austerity cuts has become a test of Prime Minister Berlusconi's government, with the opposition also preparing a motion of no confidence in the leader. The uncertainty in Rome eclipsed a political cross-party deal in Greece to approve the terms of its international bailout, although it was still short on detail.
The Greek debt crisis and the political uncertainty in Italy will continue to drive markets this week.
Monday, October 31, 2011
Weekly Market Summary
by Raymond Chatlani
On Monday, Asian stockmarkets rocketed higher, buoyed by hopes of progress in resolving Europe's debt crisis and positive export figures from Japan that point toward a recovery from a devastating tsunami earlier this year. Japan's Finance Ministry said Monday that exports rose 2.4 percent in September compared with a year earlier, marking the second consecutive month of growth. European and US markets rose after European leaders achieved some progress in talks to fix the region's finances and as strong earnings from Caterpillar boosted investor sentiment.
On Tuesday, Asian stockmarkets mostly rose following Wall Street's performance last night. European markets fell after the cancellation of a meeting of European finance ministers raised doubts that an upcoming summit will result in a clear plan to rein in Europe's debt crisis. US markets fell after data showed consumer confidence tumbled to its lowest level since March 2009.
On Wednesday, Asian markets rose modestly as markets waited for news of whether a concrete plan to tackle the eurozone's debt crisis will emerge at an EU summit later today. European markets closed modestly lower as investors waited for the outcome of the EU summit. US stockmarkets rallied as Eurozone leaders sealed a three-part deal, which they hoped would convince markets that they have an effective response to the growing economic crisis.
Officials in Brussels said an accord had been reached with banks on a 50% write-off of 100bn euro of Greek debt and that banks would seek 106 Billion Euro to recapitalise their balance sheets. It was also agreed on Wednesday to increase the 440bn euro bailout fund, perhaps to over 1trn euro. This would help protect larger economies such as Italy and Spain from the market turmoil that has already pushed three countries to need bailouts.
On Thursday, Asian stockmarkets rose following the EU rescue plan. European markets exploded higher on the Eurozone debt agreement. Wall Street rose on strong volume followed the EU debt resolution programme.
On Friday, Asian markets rose having one of their best weeks in nearly three years after a long-awaited plan to resolve the European debt crisis sparked a huge relief rally in riskier assets. European and US stockmarkets closed flat after a strong rally on a long-awaited euro zone rescue deal, but a weak sale of Italian bonds showed investor confidence in the agreement was shaky.
This morning, Asian stockmarkets fell as the dollar spiked to a three-month high against the yen following Japan's intervention, prompting investors to book profits after last week's rally.
Last week, global equities and commodities surged as investors cheered an EU rescue plan to resolve the Eurozone's debt crisis. This three part rescue plan consists of private banks agreeing to accept a write-off of 50% on Greek bonds, seek 106 Billion Euro to recapitalise their balance sheets and that the the European Financial and Stability Fund would be boosted to 1 Trillion Euro from 440 Billion Euro. A report Thursday showed that the U.S. economy expanded at a solid 2.5 annual rate in the July-September quarter. That helped ease concerns that another recession might be nearing.
This week, traders will be cautious ahead of the Group of 20 leaders' meeting later on Thursday that will focus largely on the European debt crisis. Also, the markets are waiting for further details on the EU rescue plan and its implementation.
Also, this week, investors will shift their focus to U.S. economic data, which might temper their exuberance. Three events this week will command attention: the U.S. jobs report for October, the Federal Reserve's policy meeting and Fed Chairman Ben Bernanke's quarterly news conference
On Monday, Asian stockmarkets rocketed higher, buoyed by hopes of progress in resolving Europe's debt crisis and positive export figures from Japan that point toward a recovery from a devastating tsunami earlier this year. Japan's Finance Ministry said Monday that exports rose 2.4 percent in September compared with a year earlier, marking the second consecutive month of growth. European and US markets rose after European leaders achieved some progress in talks to fix the region's finances and as strong earnings from Caterpillar boosted investor sentiment.
On Tuesday, Asian stockmarkets mostly rose following Wall Street's performance last night. European markets fell after the cancellation of a meeting of European finance ministers raised doubts that an upcoming summit will result in a clear plan to rein in Europe's debt crisis. US markets fell after data showed consumer confidence tumbled to its lowest level since March 2009.
On Wednesday, Asian markets rose modestly as markets waited for news of whether a concrete plan to tackle the eurozone's debt crisis will emerge at an EU summit later today. European markets closed modestly lower as investors waited for the outcome of the EU summit. US stockmarkets rallied as Eurozone leaders sealed a three-part deal, which they hoped would convince markets that they have an effective response to the growing economic crisis.
Officials in Brussels said an accord had been reached with banks on a 50% write-off of 100bn euro of Greek debt and that banks would seek 106 Billion Euro to recapitalise their balance sheets. It was also agreed on Wednesday to increase the 440bn euro bailout fund, perhaps to over 1trn euro. This would help protect larger economies such as Italy and Spain from the market turmoil that has already pushed three countries to need bailouts.
On Thursday, Asian stockmarkets rose following the EU rescue plan. European markets exploded higher on the Eurozone debt agreement. Wall Street rose on strong volume followed the EU debt resolution programme.
On Friday, Asian markets rose having one of their best weeks in nearly three years after a long-awaited plan to resolve the European debt crisis sparked a huge relief rally in riskier assets. European and US stockmarkets closed flat after a strong rally on a long-awaited euro zone rescue deal, but a weak sale of Italian bonds showed investor confidence in the agreement was shaky.
This morning, Asian stockmarkets fell as the dollar spiked to a three-month high against the yen following Japan's intervention, prompting investors to book profits after last week's rally.
Last week, global equities and commodities surged as investors cheered an EU rescue plan to resolve the Eurozone's debt crisis. This three part rescue plan consists of private banks agreeing to accept a write-off of 50% on Greek bonds, seek 106 Billion Euro to recapitalise their balance sheets and that the the European Financial and Stability Fund would be boosted to 1 Trillion Euro from 440 Billion Euro. A report Thursday showed that the U.S. economy expanded at a solid 2.5 annual rate in the July-September quarter. That helped ease concerns that another recession might be nearing.
This week, traders will be cautious ahead of the Group of 20 leaders' meeting later on Thursday that will focus largely on the European debt crisis. Also, the markets are waiting for further details on the EU rescue plan and its implementation.
Also, this week, investors will shift their focus to U.S. economic data, which might temper their exuberance. Three events this week will command attention: the U.S. jobs report for October, the Federal Reserve's policy meeting and Fed Chairman Ben Bernanke's quarterly news conference
Monday, October 24, 2011
Weekly Market Summary
by Raymond Chatlani
This morning, Asian markets rose amid hopes that a crucial week for the euro zone crisis will see policymakers finally come up with a plan to resolve the region's debt woes and recapitalize its banks. European stockmarkets and Wall Street stocks fell as Germany's finance minister Wolfgang Schaeuble said a forthcoming summit would not yield a definitive solution to Europe's debt crisis.
On Tuesday, Asian stockmarkets fell after Germany's finance minister cautioned against hopes for a quick fix to Europe's debt problem, and news that China's economic growth slowed a tad in the third quarter added to concerns. China’s statistics bureau said the economy grew at 9.1 percent in the third quarter, less than predicted. European markets fell on Moody's warning that it may review France's credit rating and as growth in China slowed. Wall Street rose on strong bank earnings.
On Wednesday, Asian stockmarkets rose but gains were capped after Moody's Investors Service cut Spain's sovereign ratings by two notches, adding to uncertainty over the euro zone's debt crisis and economic growth. European markets rose on optimism policymakers will take major steps at a summit this weekend to solve the festering debt crisis and offsetting the impact from a cut to Spain's sovereign credit rating. U.S. stocks fell and the euro edged lower after optimism faded that European leaders will make substantial progress on resolving the euro zone debt crisis at their summit meeting this weekend.
On Thursday, Asian and European stockmarkets slumped with investors growing wary about taking risks ahead of a key European leaders' summit on Sunday. US markets rose as jobless claims fell last week and after France and Germany said they would press ahead to solve the euro zone debt crisis, despite setbacks that meant the details might not be settled at a weekend European Union summit.
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On Friday, Asian markets closed mixed and the euro clung to overnight gains as markets largely stayed within range, and as investors awaited a weekend meeting of European leaders for signs of progress in resolving the region's debt crisis. European stockmarkets rose as members of Germany's Merkel's government repeatedly stressed Europe's two biggest economies were in agreement on the broad outlines of a deal. US indices rose after a round of solid corporate earnings reports as industrial giant General Electric Co. said that its third-quarter net income rose 18 percent.
This morning, Asian stockmarkets rocketed higher, buoyed by hopes of progress in resolving Europe's debt crisis and positive export figures from Japan that point toward a recovery from a devastating tsunami earlier this year. Japan's Finance Ministry said Monday that exports rose 2.4 percent in September compared with a year earlier, marking the second consecutive month of growth.
Last week, global equities and commodities rose in volatile conditions as investors bet that European leaders in crucial meetings over the next few days will move forward in resolving the euro zone's two-year-old debt crisis. European leaders are to meet Wednesday to hammer out a concrete resolution to the region's debt problems, including ways to fortify the euro 440 billion ($600 billion) bailout fund to help prevent larger economies that use the euro common currency, such as Italy, from being dragged into the crisis.
Weeks of intensive discussions by European leaders have so far failed to produce a decisive outcome. At the end of the day, the market is nervous, waiting to see anything substantial coming out of the summit. We are getting to a point that there have been so many false promises that they really need to deliver something big. We can expect this volatility to continue over the next two days until details emerge of the outcome from the summit next Wednesday.
This morning, Asian markets rose amid hopes that a crucial week for the euro zone crisis will see policymakers finally come up with a plan to resolve the region's debt woes and recapitalize its banks. European stockmarkets and Wall Street stocks fell as Germany's finance minister Wolfgang Schaeuble said a forthcoming summit would not yield a definitive solution to Europe's debt crisis.
On Tuesday, Asian stockmarkets fell after Germany's finance minister cautioned against hopes for a quick fix to Europe's debt problem, and news that China's economic growth slowed a tad in the third quarter added to concerns. China’s statistics bureau said the economy grew at 9.1 percent in the third quarter, less than predicted. European markets fell on Moody's warning that it may review France's credit rating and as growth in China slowed. Wall Street rose on strong bank earnings.
On Wednesday, Asian stockmarkets rose but gains were capped after Moody's Investors Service cut Spain's sovereign ratings by two notches, adding to uncertainty over the euro zone's debt crisis and economic growth. European markets rose on optimism policymakers will take major steps at a summit this weekend to solve the festering debt crisis and offsetting the impact from a cut to Spain's sovereign credit rating. U.S. stocks fell and the euro edged lower after optimism faded that European leaders will make substantial progress on resolving the euro zone debt crisis at their summit meeting this weekend.
On Thursday, Asian and European stockmarkets slumped with investors growing wary about taking risks ahead of a key European leaders' summit on Sunday. US markets rose as jobless claims fell last week and after France and Germany said they would press ahead to solve the euro zone debt crisis, despite setbacks that meant the details might not be settled at a weekend European Union summit.
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On Friday, Asian markets closed mixed and the euro clung to overnight gains as markets largely stayed within range, and as investors awaited a weekend meeting of European leaders for signs of progress in resolving the region's debt crisis. European stockmarkets rose as members of Germany's Merkel's government repeatedly stressed Europe's two biggest economies were in agreement on the broad outlines of a deal. US indices rose after a round of solid corporate earnings reports as industrial giant General Electric Co. said that its third-quarter net income rose 18 percent.
This morning, Asian stockmarkets rocketed higher, buoyed by hopes of progress in resolving Europe's debt crisis and positive export figures from Japan that point toward a recovery from a devastating tsunami earlier this year. Japan's Finance Ministry said Monday that exports rose 2.4 percent in September compared with a year earlier, marking the second consecutive month of growth.
Last week, global equities and commodities rose in volatile conditions as investors bet that European leaders in crucial meetings over the next few days will move forward in resolving the euro zone's two-year-old debt crisis. European leaders are to meet Wednesday to hammer out a concrete resolution to the region's debt problems, including ways to fortify the euro 440 billion ($600 billion) bailout fund to help prevent larger economies that use the euro common currency, such as Italy, from being dragged into the crisis.
Weeks of intensive discussions by European leaders have so far failed to produce a decisive outcome. At the end of the day, the market is nervous, waiting to see anything substantial coming out of the summit. We are getting to a point that there have been so many false promises that they really need to deliver something big. We can expect this volatility to continue over the next two days until details emerge of the outcome from the summit next Wednesday.
Monday, October 10, 2011
Weekly Market Summary
by Raymond Chatlani
On Monday, Global markets continued to fall on fears that a Greek default is imminent. Greece reported that the deficit for this year would be 8.5 percent which is above the expected target of 7.6 percent. it was explained that this was due to a 5.5 percent contraction in GDP.
On Tuesday, Asian stockmarkets continued their falls on growing doubts over Greece's ability to avoid default that fuelled fears of global financial turmoil and recession. European markets fell on increased worries about a major banking crisis in Europe and expectations that Greece would default soon. A late rally in U.S. stocks pulled Wall Street out of bear market territory on Tuesday, and the euro rose versus the dollar after Federal Reserve Chairman Ben Bernanke promised more economic stimulus if needed.
On Wednesday, Asian markets trimmed earlier gains as traders wait to see if Bernanke will definitely provide economic stimulus. U.S. and European stock markets traded higher amid reports monetary officials in Europe are working to shore up the weak European banking sector, in case Greece should actually default on its debt obligations in the near term.
On Thursday, Asian stockmarkets followed global stocks higher, buoyed by a recovery across a broad range of assets on optimism over Europe's efforts to aid the region's financial sector and U.S. data suggesting the economy could avoid recession. European and US markets rose as Europe moved closer to pumping aid to the region's troubled banks and U.S. jobless benefit claims rose less than expected last week. The European Central Bank (ECB) announced aggressive liquidity measures on Thursday, throwing a lifeline to lenders who have seen wholesale funding drying up as market confidence ebbed. The European Central Bank said it was ready to buy bonds to provide longer-term cheap money for European lenders in need of funding.
On Friday, Asian markets rose for a third day following the ECB's agressive moves to provide liquidity to financial institutions. European stockmarkets rose on good US jobs data. Wall street fell after a ratings downgrades of Spain and Italy buffeted markets.
This morning, Asian stockmarkets closed mostly higher except for China and Hong Kong as on Sunday, French President Sarkozy and German Chancellor Merkel agreed a package of measures to help stabilise the eurozone by the end of the month.
Last week global markets and commodities rose modestly supported by assurances from the Federal Reserve that more economic stimulus would be provided if needed, promises by EU officials that European banks would be recapitalized to help deal with a potential debt default by Greece and yesterday's agreement between France and Germany to allow additional measures to stabilise the Eurozone by the end of the month.
As in previous weeks, we are still only seeing rhetoric by global officials without concrete action being taken. While short term action by the ECB to provide liquidity will ease the anxiety of the market for now, this present volatility is expected to continue until additional monetary policy measures are actually implemented later on this month.
On Monday, Global markets continued to fall on fears that a Greek default is imminent. Greece reported that the deficit for this year would be 8.5 percent which is above the expected target of 7.6 percent. it was explained that this was due to a 5.5 percent contraction in GDP.
On Tuesday, Asian stockmarkets continued their falls on growing doubts over Greece's ability to avoid default that fuelled fears of global financial turmoil and recession. European markets fell on increased worries about a major banking crisis in Europe and expectations that Greece would default soon. A late rally in U.S. stocks pulled Wall Street out of bear market territory on Tuesday, and the euro rose versus the dollar after Federal Reserve Chairman Ben Bernanke promised more economic stimulus if needed.
On Wednesday, Asian markets trimmed earlier gains as traders wait to see if Bernanke will definitely provide economic stimulus. U.S. and European stock markets traded higher amid reports monetary officials in Europe are working to shore up the weak European banking sector, in case Greece should actually default on its debt obligations in the near term.
On Thursday, Asian stockmarkets followed global stocks higher, buoyed by a recovery across a broad range of assets on optimism over Europe's efforts to aid the region's financial sector and U.S. data suggesting the economy could avoid recession. European and US markets rose as Europe moved closer to pumping aid to the region's troubled banks and U.S. jobless benefit claims rose less than expected last week. The European Central Bank (ECB) announced aggressive liquidity measures on Thursday, throwing a lifeline to lenders who have seen wholesale funding drying up as market confidence ebbed. The European Central Bank said it was ready to buy bonds to provide longer-term cheap money for European lenders in need of funding.
On Friday, Asian markets rose for a third day following the ECB's agressive moves to provide liquidity to financial institutions. European stockmarkets rose on good US jobs data. Wall street fell after a ratings downgrades of Spain and Italy buffeted markets.
This morning, Asian stockmarkets closed mostly higher except for China and Hong Kong as on Sunday, French President Sarkozy and German Chancellor Merkel agreed a package of measures to help stabilise the eurozone by the end of the month.
Last week global markets and commodities rose modestly supported by assurances from the Federal Reserve that more economic stimulus would be provided if needed, promises by EU officials that European banks would be recapitalized to help deal with a potential debt default by Greece and yesterday's agreement between France and Germany to allow additional measures to stabilise the Eurozone by the end of the month.
As in previous weeks, we are still only seeing rhetoric by global officials without concrete action being taken. While short term action by the ECB to provide liquidity will ease the anxiety of the market for now, this present volatility is expected to continue until additional monetary policy measures are actually implemented later on this month.
Tuesday, October 4, 2011
Weekly Markey Summary
by Raymond Chatlani
On Monday, Asian markets tumbled on rumours that European leaders would accept some form of Greek default. European shares rose on reports that European leaders were mulling additional ways to stem contagion from the Greek debt crisis. Their plan envisages an increase in the size of the bailout fund to 2 trillion euros and is expected to involve a 50% write-down of Greek government debt. Banks with large exposures to Greek debt would be strengthened to ensure stability should Greece partially default. US stockmarkets rose on hopes that European officials would stabilise the Eurozone debt problem.
On Tuesday, Asian shares rebounded on bargain hunting on hopes that euro zone officials will act to corral Greece's debt woes and prevent another full-blown banking crisis. European stockmarkets expleded higher amid hope that plans are being crafted to help restore the region's fiscal and financial conditions. Wall Street ended 1.5 percent higher but gave up half its gains at the close after initially opening up 3 percent.
On Wednesday, Asian markets closed mixed, after a second day of rallies on Wall Street and in Europe, on cautious hope that eurozone leaders are plotting a solution to the region's debt crisis. But the gains, the second in a row, quickly faded due to the lack of concrete evidence of a plan, while traders looked ahead to a key vote Thursday in Germany, where MPs will decide on expanding a rescue fund for debt-mired European countries. European and US stockmarkets fell due to the high degree of uncertainty about the European situation and its effects on economic growth. There is a split between EU members over the terms of Greece’s second €109bn bail-out with members including Germany and the Netherlands calling for more losses to be imposed on the private sector, something France and the ECB oppose for fears of another rout of European banking stocks.
On Thursday, Asian shares and commodities fell on growing worries that Europe's intractable debt problems will plunge the world economy into a second global financial crisis. European stockmarkets rose following the passing through the German Bundestag of plans to expand the European Financial Stability Fund (EFSF). US markets rose as traders were relieved that Germany passed a measure to expand the powers of a regional bailout fund. That eased worries that U.S. banks could be buffeted by another bout of turmoil in Europe's financial system.
On Friday, Asian stockmarkets fell as China, the world's biggest metals consumer, saw its manufacturing sector contracting for a third consecutive month in September, suggesting the world's second-largest economy was not immune to global headwinds, while factory inflation quickened. European markets fell as retail sales in Germany, Europe's largest economy, came in below expectations, dropping 2.9% in July. The reading marked the biggest drop in more than four years and underscored a possible slowdown in the global economy. Wall Street fell heavily as investors fled to the safety of US treasuries.
On Monday, Global markets continued to fall on fears that a Greek default is imminent. Greece reported that the deficit for this year would be 8.5 percent which is above the expected target of 7.6 percent. it was explained that this was due to a 5.5 percent contraction in GDP.
This morning, Asian stockmarkets continued their falls on growing doubts over Greece's ability to avoid default that fuelled fears of global financial turmoil and recession.
Last week global stocks posted their worst quarter in nearly three years in July-September, due to persistent fears about the world economy and the lack of a convincing solution to Europe's debt problems. All commodities fell heavily except for gold which recovered later on last week and yesterday as investors sought safe havens on growing expectations of a Greek default that has increased fears of a global recession. A bid for safety also increased demand for US treasuries.
In a couple of weeks Greece will declare bankruptcy as funds will run out. Unless the EU, IMF and the ECB provide funds soon, we can expect world markets and commodities to continue their falls this week as investors are fed up with rhetoric and have completely lost their faith and trust in Governments.
On Monday, Asian markets tumbled on rumours that European leaders would accept some form of Greek default. European shares rose on reports that European leaders were mulling additional ways to stem contagion from the Greek debt crisis. Their plan envisages an increase in the size of the bailout fund to 2 trillion euros and is expected to involve a 50% write-down of Greek government debt. Banks with large exposures to Greek debt would be strengthened to ensure stability should Greece partially default. US stockmarkets rose on hopes that European officials would stabilise the Eurozone debt problem.
On Tuesday, Asian shares rebounded on bargain hunting on hopes that euro zone officials will act to corral Greece's debt woes and prevent another full-blown banking crisis. European stockmarkets expleded higher amid hope that plans are being crafted to help restore the region's fiscal and financial conditions. Wall Street ended 1.5 percent higher but gave up half its gains at the close after initially opening up 3 percent.
On Wednesday, Asian markets closed mixed, after a second day of rallies on Wall Street and in Europe, on cautious hope that eurozone leaders are plotting a solution to the region's debt crisis. But the gains, the second in a row, quickly faded due to the lack of concrete evidence of a plan, while traders looked ahead to a key vote Thursday in Germany, where MPs will decide on expanding a rescue fund for debt-mired European countries. European and US stockmarkets fell due to the high degree of uncertainty about the European situation and its effects on economic growth. There is a split between EU members over the terms of Greece’s second €109bn bail-out with members including Germany and the Netherlands calling for more losses to be imposed on the private sector, something France and the ECB oppose for fears of another rout of European banking stocks.
On Thursday, Asian shares and commodities fell on growing worries that Europe's intractable debt problems will plunge the world economy into a second global financial crisis. European stockmarkets rose following the passing through the German Bundestag of plans to expand the European Financial Stability Fund (EFSF). US markets rose as traders were relieved that Germany passed a measure to expand the powers of a regional bailout fund. That eased worries that U.S. banks could be buffeted by another bout of turmoil in Europe's financial system.
On Friday, Asian stockmarkets fell as China, the world's biggest metals consumer, saw its manufacturing sector contracting for a third consecutive month in September, suggesting the world's second-largest economy was not immune to global headwinds, while factory inflation quickened. European markets fell as retail sales in Germany, Europe's largest economy, came in below expectations, dropping 2.9% in July. The reading marked the biggest drop in more than four years and underscored a possible slowdown in the global economy. Wall Street fell heavily as investors fled to the safety of US treasuries.
On Monday, Global markets continued to fall on fears that a Greek default is imminent. Greece reported that the deficit for this year would be 8.5 percent which is above the expected target of 7.6 percent. it was explained that this was due to a 5.5 percent contraction in GDP.
This morning, Asian stockmarkets continued their falls on growing doubts over Greece's ability to avoid default that fuelled fears of global financial turmoil and recession.
Last week global stocks posted their worst quarter in nearly three years in July-September, due to persistent fears about the world economy and the lack of a convincing solution to Europe's debt problems. All commodities fell heavily except for gold which recovered later on last week and yesterday as investors sought safe havens on growing expectations of a Greek default that has increased fears of a global recession. A bid for safety also increased demand for US treasuries.
In a couple of weeks Greece will declare bankruptcy as funds will run out. Unless the EU, IMF and the ECB provide funds soon, we can expect world markets and commodities to continue their falls this week as investors are fed up with rhetoric and have completely lost their faith and trust in Governments.
Monday, September 26, 2011
Weekly Market Summary
by Raymond Chatlani
On Monday, Asian stockmarkets fell after German Chancellor Angela Merkel's reiteration on Friday of her objection to the introduction of euro bonds, and an unexpectedly low 75 percent participation in Greece's debt initiative, below the 90 percent target. European and US stockmarkets tanked on prospects of a Greek default and increasing fears that the single currency may be forced to break up unless greater fiscal integration is brought in.
On Tuesday, Asian stockmarkets and the euro fell after ratings agency S&P downgraded Italy a notch amid fears of a Greek default, as investors worried that the euro zone's debt woes will pitch the global financial system into a full-blown banking crisis. European markets rose despite a credit rating downgrade for Italy that heightened tensions surrounding the eurozone debt crisis with Greece struggling to avert a default as investors waited in anticipation the start today of a Federal Reserve monetary policy meeting. Wall Street rose as investors hoped the Federal Reserve's policy panel would add more monetary stimulus to kick-start economic recovery.
On Wednesday, Asian stockmarkets rose as investors waited to see if at the end of its two day meeting, the FEDS would announce further monetary policies to aid the global economy. European markets fell on fresh concerns over banks' exposure to indebted Greece. US equities fell after the U.S. Federal Reserve's widely expected plan to buy $400 billion in long-term debt failed to convince investors that "operation twist" would be enough to revive growth. The Feds intend to sell $400 billion of short-term Treasury bonds to buy longer-dated debt aimed at stimulating the economy by forcing down long-term borrowing costs.
On Thursday, Asian stockmarkets fell following a slide on Wall Street, as investors took fright at a warning from the Federal Reserve that the United States faced a grim economic outlook with "significant downside risks". HSBC China Flash PMI survey showed factory output fell for a third consecutive month in September, pointing to a slowdown in the world's second largest economy which further accelerated falls in Asia. European stocks slumped echoing falls elsewhere, after the US Federal Reserve disappointed investors with its stimulus plans and warned of serious downside risks amid the stubborn eurozone debt crisis. Wall Street plunged after the Federal Reserve indicated that the U.S. economic slump could last for years.
On Friday, Asian stockmarkets fell on prospects of a global recession as investors shed risky assets from portfolios and scurried to safer havens. European and US markets recovered from initial losses and closed in positive territory on talk that the European Central Bank might add liquidity to shore up the region's vulnerable banking system but persisting worries about a global recession kept markets volatile.
This morning, Asian markets tumbled on rumours that European leaders would accept some form of Greek default.
Last week, global equities and commodities tumbled as investors sought safe havens by buying the US Dollar and US treasuries on alarm at the U.S. Federal Reserve's dire outlook for the world's biggest economy at its two-day policy meeting last Thursday. The twin fears of U.S. recession and a banking crisis brought on by Europe sovereign debt woes have haunted equity markets in recent months and fuelled a sharp sell-off in early August and renewed weakness this month.
Commodities were decimated with oil, copper, gold and silver all falling over ten percent on fears that governments have done too little to head off a global recession. Financial markets are sick and tired of the authorities in Europe and in the U.S. twiddling their thumbs and not doing substantive things to solve this crisis of the global economy,
This weekend Finance ministers from the G20 nations gathered at a meeting of the International Monetary Fund (IMF) in Washington. It is expected that a plan to rescue the European single currency could be revealed within days. It is believed to involve beefing up the European Financial Stability Facility and an injection of funds into a number of continental banks.
The plans would lead to an orderly default by Greece but allow the country to remain within the eurozone in a bid to relieve some of the economic pressure on Spain and Italy.
Unless world leaders especially EU Governments act soon, we can only expect more of the same.
On Monday, Asian stockmarkets fell after German Chancellor Angela Merkel's reiteration on Friday of her objection to the introduction of euro bonds, and an unexpectedly low 75 percent participation in Greece's debt initiative, below the 90 percent target. European and US stockmarkets tanked on prospects of a Greek default and increasing fears that the single currency may be forced to break up unless greater fiscal integration is brought in.
On Tuesday, Asian stockmarkets and the euro fell after ratings agency S&P downgraded Italy a notch amid fears of a Greek default, as investors worried that the euro zone's debt woes will pitch the global financial system into a full-blown banking crisis. European markets rose despite a credit rating downgrade for Italy that heightened tensions surrounding the eurozone debt crisis with Greece struggling to avert a default as investors waited in anticipation the start today of a Federal Reserve monetary policy meeting. Wall Street rose as investors hoped the Federal Reserve's policy panel would add more monetary stimulus to kick-start economic recovery.
On Wednesday, Asian stockmarkets rose as investors waited to see if at the end of its two day meeting, the FEDS would announce further monetary policies to aid the global economy. European markets fell on fresh concerns over banks' exposure to indebted Greece. US equities fell after the U.S. Federal Reserve's widely expected plan to buy $400 billion in long-term debt failed to convince investors that "operation twist" would be enough to revive growth. The Feds intend to sell $400 billion of short-term Treasury bonds to buy longer-dated debt aimed at stimulating the economy by forcing down long-term borrowing costs.
On Thursday, Asian stockmarkets fell following a slide on Wall Street, as investors took fright at a warning from the Federal Reserve that the United States faced a grim economic outlook with "significant downside risks". HSBC China Flash PMI survey showed factory output fell for a third consecutive month in September, pointing to a slowdown in the world's second largest economy which further accelerated falls in Asia. European stocks slumped echoing falls elsewhere, after the US Federal Reserve disappointed investors with its stimulus plans and warned of serious downside risks amid the stubborn eurozone debt crisis. Wall Street plunged after the Federal Reserve indicated that the U.S. economic slump could last for years.
On Friday, Asian stockmarkets fell on prospects of a global recession as investors shed risky assets from portfolios and scurried to safer havens. European and US markets recovered from initial losses and closed in positive territory on talk that the European Central Bank might add liquidity to shore up the region's vulnerable banking system but persisting worries about a global recession kept markets volatile.
This morning, Asian markets tumbled on rumours that European leaders would accept some form of Greek default.
Last week, global equities and commodities tumbled as investors sought safe havens by buying the US Dollar and US treasuries on alarm at the U.S. Federal Reserve's dire outlook for the world's biggest economy at its two-day policy meeting last Thursday. The twin fears of U.S. recession and a banking crisis brought on by Europe sovereign debt woes have haunted equity markets in recent months and fuelled a sharp sell-off in early August and renewed weakness this month.
Commodities were decimated with oil, copper, gold and silver all falling over ten percent on fears that governments have done too little to head off a global recession. Financial markets are sick and tired of the authorities in Europe and in the U.S. twiddling their thumbs and not doing substantive things to solve this crisis of the global economy,
This weekend Finance ministers from the G20 nations gathered at a meeting of the International Monetary Fund (IMF) in Washington. It is expected that a plan to rescue the European single currency could be revealed within days. It is believed to involve beefing up the European Financial Stability Facility and an injection of funds into a number of continental banks.
The plans would lead to an orderly default by Greece but allow the country to remain within the eurozone in a bid to relieve some of the economic pressure on Spain and Italy.
Unless world leaders especially EU Governments act soon, we can only expect more of the same.
Weekly Market Summary
By Raymond Chatlani
This morning, Asian markets plunged after Friday's steep selling in Europe and the US. Also, as the dollar strengthened, investors shunned commodity risk because of Europe's deepening sovereign debt crisis. Friday's resignation of ECB board member German Juergen Stark has cast further doubt that Europe has the ability to tackle its worsening sovereign debt crisis. European markets continued their falls on concerns that Greece could default. US stockmarkets initially fell but recovered towards the close after a report that Italy may get financial support from China lifted Wall Street.
On Tuesday, Asian stockmarkets rose after the Financial Times reported on its website on Monday that Italy had asked China to make "significant" purchases of Italian debt. European indices fell on concerns that the Greek debt crisis is still unresolved but rallied strongly into positive territory on rumours that emerging countries would purchase European debt. US markets initially fell but closed strongly positive by headlines that suggested BRIC countries are in talks to purchase eurozone debt.
On Wednesday, Asian stocks fell after Moody's Investors Service downgraded credit ratings on Credit Agricole and Societe Generale by one notch, as expected, citing their exposure to the Greek economy. European and US stockmarkets rose as optimism over tentative steps to resolve Europe's debt crisis overcame still widespread fears that Greece will ultimately default on its debt.
On Thursday, Asian markets mostly rose on optimism that Europe will be able to get a handle on its sovereign debt crisis after reassuring words from European leaders aimed at soothing jittery financial markets. In a teleconference Wednesday night, German Chancellor Angela Merkel and French President Nicolas Sarkozy pledged to help Greece avoid a debt default and Greek Prime Minister Papandreou renewed his commitment to debt-reduction targets. European stockmarkets rose for a second day after the ECB said that it had decided to launch three-month loans in coordination with the U.S. Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank. Wall Street rose after central banks in Europe and the U.S. announced a joint move to support European banks.
On Friday, a decision by European central banks to support the region's financial system helped calm Asian markets, setting off a rally across the region. European and US stockmarkets rose on improved sentiment as traders chased gains following the previous day's joint announcement by various Central Banks that unlimited three month US Dollar loans would be provided to banks until the end of the year.
This morning, Asian stockmarkets fell after German Chancellor Angela Merkel's reiteration on Friday of her objection to the introduction of euro bonds, and an unexpectedly low 75 percent participation in Greece's debt initiative, below the 90 percent target.
Last week global equities rose on expectations that Italian bonds would be purchased by China, that the BRIC countries would purchase Eurozone bonds and that a number of Central banks launched a joint operation to pump liquidity to European banks to withstand the Eurozone debt crisis.
At the moment markets are in limbo with a lot of cash waiting in the sidelines as investors are torn between a possible recession in the US and Europe or whether these regions will be able to limp along with anemic growth. Also, weak leadership in the European Union where different countries have diverse views as to how to resolve the Greek default problem is keeping investment flowing to the EU. The most recent event is Merkel's objection to the introduction of Euro bonds while most European leaders are in favour of utilising this tool as needed.
This week the main event that will influence markets is the outcome of the two day FEDS meeting which will end on Wednesday where investors are eagerly waiting to see what monetary policies will be launched by US Federal Reserve Chairman Ben Bernanke. These policies may sway markets either way where confidence will be restored or see the present poor sentiment deteriorate.
This morning, Asian markets plunged after Friday's steep selling in Europe and the US. Also, as the dollar strengthened, investors shunned commodity risk because of Europe's deepening sovereign debt crisis. Friday's resignation of ECB board member German Juergen Stark has cast further doubt that Europe has the ability to tackle its worsening sovereign debt crisis. European markets continued their falls on concerns that Greece could default. US stockmarkets initially fell but recovered towards the close after a report that Italy may get financial support from China lifted Wall Street.
On Tuesday, Asian stockmarkets rose after the Financial Times reported on its website on Monday that Italy had asked China to make "significant" purchases of Italian debt. European indices fell on concerns that the Greek debt crisis is still unresolved but rallied strongly into positive territory on rumours that emerging countries would purchase European debt. US markets initially fell but closed strongly positive by headlines that suggested BRIC countries are in talks to purchase eurozone debt.
On Wednesday, Asian stocks fell after Moody's Investors Service downgraded credit ratings on Credit Agricole and Societe Generale by one notch, as expected, citing their exposure to the Greek economy. European and US stockmarkets rose as optimism over tentative steps to resolve Europe's debt crisis overcame still widespread fears that Greece will ultimately default on its debt.
On Thursday, Asian markets mostly rose on optimism that Europe will be able to get a handle on its sovereign debt crisis after reassuring words from European leaders aimed at soothing jittery financial markets. In a teleconference Wednesday night, German Chancellor Angela Merkel and French President Nicolas Sarkozy pledged to help Greece avoid a debt default and Greek Prime Minister Papandreou renewed his commitment to debt-reduction targets. European stockmarkets rose for a second day after the ECB said that it had decided to launch three-month loans in coordination with the U.S. Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank. Wall Street rose after central banks in Europe and the U.S. announced a joint move to support European banks.
On Friday, a decision by European central banks to support the region's financial system helped calm Asian markets, setting off a rally across the region. European and US stockmarkets rose on improved sentiment as traders chased gains following the previous day's joint announcement by various Central Banks that unlimited three month US Dollar loans would be provided to banks until the end of the year.
This morning, Asian stockmarkets fell after German Chancellor Angela Merkel's reiteration on Friday of her objection to the introduction of euro bonds, and an unexpectedly low 75 percent participation in Greece's debt initiative, below the 90 percent target.
Last week global equities rose on expectations that Italian bonds would be purchased by China, that the BRIC countries would purchase Eurozone bonds and that a number of Central banks launched a joint operation to pump liquidity to European banks to withstand the Eurozone debt crisis.
At the moment markets are in limbo with a lot of cash waiting in the sidelines as investors are torn between a possible recession in the US and Europe or whether these regions will be able to limp along with anemic growth. Also, weak leadership in the European Union where different countries have diverse views as to how to resolve the Greek default problem is keeping investment flowing to the EU. The most recent event is Merkel's objection to the introduction of Euro bonds while most European leaders are in favour of utilising this tool as needed.
This week the main event that will influence markets is the outcome of the two day FEDS meeting which will end on Wednesday where investors are eagerly waiting to see what monetary policies will be launched by US Federal Reserve Chairman Ben Bernanke. These policies may sway markets either way where confidence will be restored or see the present poor sentiment deteriorate.
Monday, September 12, 2011
Weekly Market Summary
by Raymond Chatlani
On Monday, Asian markets fell on Friday's disappointing US jobs data. European stockmarkets plunged as risk aversion and ongoing concerns about the eurozone debt crisis weighted on market sentiment. Wall Street was closed for the Labour day holiday.
On Tuesday, Asian stockmarkets fell amid fears that Europe's sovereign debt troubles are worsening and could trigger a second full-blown banking crisis after European stocks tumbled 4 percent on Monday, with financial shares falling to their lowest in more than 2 years. European markets continued to fall amid doubts about the will in Italy and Greece to push through austerity measures demanded by their partners, and hardening opposition to further aid in the bloc's paymaster Germany. US markets fell as they caught up with the markets after being closed yesterday due to a holiday in the USA.
On Wednesday, Asian stockmarkets rose on bargain hunting as value driven investors bought equities. European markets rose after a German court ruled against blocking bailout packages. Germany's Constitutional Court rejected a series of lawsuits aimed at blocking Germany's participation in bailout packages for Greece and other euro zone countries, but said parliament must have a bigger say in future rescues. Wall Street rose on relief that the bailout could continue in Europe.
On Thursday, Asian markets closed mixed as investors waited for statements from the ECB and US FEDS chairman Bernanke on anticipation that some form of quantitive easing would be announced. European stockmarkets rose as the ECB held rates at 1.5 percent. US indexes fell as investors were disappointed that while Bernanke did state that the FEDS would do everything to aid economic growth and employment, there was no indication as to what monetary tools would be used to support economic growth. Gold recovered after falling 3 percent the previous day as President Obama announced a $447 billion jobs plan to spur job growth, a mix of tax cuts and new spending. This is bullish for gold as more money is expected to be printed to support this plan.
On Friday, Asian stockmarkets closed mixed as traders weighed news China's inflation moderated slightly against disappointment that Fed chief Ben Bernanke offered no immediate support for the ailing U.S. economy. European and US markets fell as a jobs proposal by President Barack Obama did little to reassure investors concerned about weak economic growth. German Stark, a top ECB board member resigned with both Europe and the US falling further at the close.
This morning, Asian markets plunged after Friday's steep selling in Europe and the US. Also, as the dollar strengthened, investors shunned commodity risk because of Europe's deepening sovereign debt crisis. Friday's resignation of ECB board member German Juergen Stark has cast further doubt that Europe has the ability to tackle its worsening sovereign debt crisis.
Last week, global equities and commodities were decimated as investors worry that the US is falling into recession and on concerns that Europe's sovereign debt crisis is deepening. The only assets that finished in positive territory were gold and the US Dollar as safe havens were sought.
Although Italy's centre-right government promised on Tuesday to hike value-added tax as it bowed to market pressure for more action on its swollen debt and ignored mass street protests and strikes against its austerity measures and Greece's finance minister pledged to speed up delayed privatisations and structural reforms, while his Irish counterpart said Dublin was considering making a deeper fiscal adjustment than planned next year to boost market confidence, investors fled from equities, sold the Euro and purchased the US Dollar and treasuries. Greece's one year bond hit yields of over 80 percent last week, which is signalling that the markets believe that a default is inevitable.
Unless world leaders come up with clear fiscal policy solutions, we can expect global markets to continue to be volatile with a bias towards lower values.
On Monday, Asian markets fell on Friday's disappointing US jobs data. European stockmarkets plunged as risk aversion and ongoing concerns about the eurozone debt crisis weighted on market sentiment. Wall Street was closed for the Labour day holiday.
On Tuesday, Asian stockmarkets fell amid fears that Europe's sovereign debt troubles are worsening and could trigger a second full-blown banking crisis after European stocks tumbled 4 percent on Monday, with financial shares falling to their lowest in more than 2 years. European markets continued to fall amid doubts about the will in Italy and Greece to push through austerity measures demanded by their partners, and hardening opposition to further aid in the bloc's paymaster Germany. US markets fell as they caught up with the markets after being closed yesterday due to a holiday in the USA.
On Wednesday, Asian stockmarkets rose on bargain hunting as value driven investors bought equities. European markets rose after a German court ruled against blocking bailout packages. Germany's Constitutional Court rejected a series of lawsuits aimed at blocking Germany's participation in bailout packages for Greece and other euro zone countries, but said parliament must have a bigger say in future rescues. Wall Street rose on relief that the bailout could continue in Europe.
On Thursday, Asian markets closed mixed as investors waited for statements from the ECB and US FEDS chairman Bernanke on anticipation that some form of quantitive easing would be announced. European stockmarkets rose as the ECB held rates at 1.5 percent. US indexes fell as investors were disappointed that while Bernanke did state that the FEDS would do everything to aid economic growth and employment, there was no indication as to what monetary tools would be used to support economic growth. Gold recovered after falling 3 percent the previous day as President Obama announced a $447 billion jobs plan to spur job growth, a mix of tax cuts and new spending. This is bullish for gold as more money is expected to be printed to support this plan.
On Friday, Asian stockmarkets closed mixed as traders weighed news China's inflation moderated slightly against disappointment that Fed chief Ben Bernanke offered no immediate support for the ailing U.S. economy. European and US markets fell as a jobs proposal by President Barack Obama did little to reassure investors concerned about weak economic growth. German Stark, a top ECB board member resigned with both Europe and the US falling further at the close.
This morning, Asian markets plunged after Friday's steep selling in Europe and the US. Also, as the dollar strengthened, investors shunned commodity risk because of Europe's deepening sovereign debt crisis. Friday's resignation of ECB board member German Juergen Stark has cast further doubt that Europe has the ability to tackle its worsening sovereign debt crisis.
Last week, global equities and commodities were decimated as investors worry that the US is falling into recession and on concerns that Europe's sovereign debt crisis is deepening. The only assets that finished in positive territory were gold and the US Dollar as safe havens were sought.
Although Italy's centre-right government promised on Tuesday to hike value-added tax as it bowed to market pressure for more action on its swollen debt and ignored mass street protests and strikes against its austerity measures and Greece's finance minister pledged to speed up delayed privatisations and structural reforms, while his Irish counterpart said Dublin was considering making a deeper fiscal adjustment than planned next year to boost market confidence, investors fled from equities, sold the Euro and purchased the US Dollar and treasuries. Greece's one year bond hit yields of over 80 percent last week, which is signalling that the markets believe that a default is inevitable.
Unless world leaders come up with clear fiscal policy solutions, we can expect global markets to continue to be volatile with a bias towards lower values.
Wednesday, September 7, 2011
Weekly Market Summary
by Raymond Chatlani
On Monday, Asian stocks rose after US Federal Reserve Chairman Ben Bernanke left the door open for further action to stimulate the economy and fight high unemployment. European shares gained tracking a late rally in Wall Street on Friday, after U.S. Federal Reserve chairman Ben Bernanke raised hopes for more stimulus for the troubled economy at the U.S. central bank's September meeting. US stockmarkets rose supported by European and Asian equities that rallied partly on a possible merger between two big banks in Greece. Wall Street traders were also relieved that Hurricane Irene caused less damage than feared in New York City over the weekend.
On Tuesday, Asian stockmarkets rose after better-than-expected U.S. consumer spending data and a bank merger in Greece offered investors some rare good news about the outlook for indebted developed world economies. European indices initially fell except for London (which played catch up as it was a bank holiday on Monday in the UK) as consumer and business confidence in the eurozone economy slumped in August, falling for the sixth consecutive month, an EU survey showed amid rising fears of an economic slowdown. European markets recovered towards the end of the day and closed mixed. Wall Street closed positive in choppy trade as a recovery in risk appetite among some investors was countered by bearish economic news. U.S. consumer confidence hit a two-year low in August and prices of single-family homes dipped in June from May as the U.S. housing market continued to crawl along at depressed levels, data showed.
On Wednesday, Asian stockmarkets rose as investors put aside concerns over flagging consumer and business confidence in developed economies to hunt for bargains after gains on Wall Street. European shares rocketed on hopes the U.S. Federal Reserve would support the fragile recovery with fresh stimulus measures. US markets rose as hopes for more help from the U.S. Federal Reserve drove buying in equities, oil and metals.
On Thursday, Asian markets rose as China's official purchasing managers' index rose to 50.9 in August from a 28-month low of 50.7 in July, official data showed, while upbeat sentiment across financial markets lifted Asian stocks on hopes the U.S. Federal Reserve would intervene to support the economy. European shares slid on dismal eurozone manufacturing figures, making a downbeat start to September after an extremely volatile August which was haunted by shadows of global recession but recovered towards the close with investors encouraged by data showing U.S. factory activity cooling in August but still expanding. The eurozone manufacturing purchasing managers' index (PMI), compiled by Markit, logged 49.0 points in August, down from 50.4 in July. Any score below 50 indicates contraction, while anything above suggests expansion. US stockmarkets fell as data spurred fears of recession as investors wait for tomorrow's U.S. jobs data for August.
On Friday, Asian stockmarkets fell on weak global data and fears of recession. European markets plunged on renewed concern over the Greek debt crisis. US indices fell on very weak employment figures where the private sector created 17,000 jobs only in August which was offset by the US Government where employment went down by about 17,000 jobs. This last occurred sixty years ago.
This morning, Asian markets fell on Friday's disappointing US jobs data.
Last week, global equities and commodities fell on fears that the global economy is entering recession. Consumer and business confidence slunped in the Eurozone and US during August. In the US, prices of single family homes dipped in June which shows that the US housing market has not yet reached bottom. On Friday, The zero net growth in US jobs in August reinforced concerns that the US economy has stalled. Gold and silver were the only beneficiaries.
While two weeks ago, mounting speculation that the Fed is preparing a new round of monetary expansion helped the market regain its footing, last week both businesses and consumers were very worried by the slowdown in domestic economic activity, heightened financial market turmoil, ongoing serious concerns over the eurozone sovereign debt situation and increased fears over the health of the global economy. Investors fear that without further stimulus, the global economy will fall into recession.
Short term, the markets will have to jump the hurdle of this Wednesday's German Federal Constitutional court ruling on suits claiming Berlin is breaking German law and European treaties by contributing to multi-billion euro bailouts of Greece, Ireland and Portugal. Longer term, the result of the FEDS two day meeting on 20-21 September will greatly affect markets as the Federal Reserve are under pressure to provide more stimulus to aid the frail recovery.
Volatility is expected to continue until we know the outcome of these two important events.
On Monday, Asian stocks rose after US Federal Reserve Chairman Ben Bernanke left the door open for further action to stimulate the economy and fight high unemployment. European shares gained tracking a late rally in Wall Street on Friday, after U.S. Federal Reserve chairman Ben Bernanke raised hopes for more stimulus for the troubled economy at the U.S. central bank's September meeting. US stockmarkets rose supported by European and Asian equities that rallied partly on a possible merger between two big banks in Greece. Wall Street traders were also relieved that Hurricane Irene caused less damage than feared in New York City over the weekend.
On Tuesday, Asian stockmarkets rose after better-than-expected U.S. consumer spending data and a bank merger in Greece offered investors some rare good news about the outlook for indebted developed world economies. European indices initially fell except for London (which played catch up as it was a bank holiday on Monday in the UK) as consumer and business confidence in the eurozone economy slumped in August, falling for the sixth consecutive month, an EU survey showed amid rising fears of an economic slowdown. European markets recovered towards the end of the day and closed mixed. Wall Street closed positive in choppy trade as a recovery in risk appetite among some investors was countered by bearish economic news. U.S. consumer confidence hit a two-year low in August and prices of single-family homes dipped in June from May as the U.S. housing market continued to crawl along at depressed levels, data showed.
On Wednesday, Asian stockmarkets rose as investors put aside concerns over flagging consumer and business confidence in developed economies to hunt for bargains after gains on Wall Street. European shares rocketed on hopes the U.S. Federal Reserve would support the fragile recovery with fresh stimulus measures. US markets rose as hopes for more help from the U.S. Federal Reserve drove buying in equities, oil and metals.
On Thursday, Asian markets rose as China's official purchasing managers' index rose to 50.9 in August from a 28-month low of 50.7 in July, official data showed, while upbeat sentiment across financial markets lifted Asian stocks on hopes the U.S. Federal Reserve would intervene to support the economy. European shares slid on dismal eurozone manufacturing figures, making a downbeat start to September after an extremely volatile August which was haunted by shadows of global recession but recovered towards the close with investors encouraged by data showing U.S. factory activity cooling in August but still expanding. The eurozone manufacturing purchasing managers' index (PMI), compiled by Markit, logged 49.0 points in August, down from 50.4 in July. Any score below 50 indicates contraction, while anything above suggests expansion. US stockmarkets fell as data spurred fears of recession as investors wait for tomorrow's U.S. jobs data for August.
On Friday, Asian stockmarkets fell on weak global data and fears of recession. European markets plunged on renewed concern over the Greek debt crisis. US indices fell on very weak employment figures where the private sector created 17,000 jobs only in August which was offset by the US Government where employment went down by about 17,000 jobs. This last occurred sixty years ago.
This morning, Asian markets fell on Friday's disappointing US jobs data.
Last week, global equities and commodities fell on fears that the global economy is entering recession. Consumer and business confidence slunped in the Eurozone and US during August. In the US, prices of single family homes dipped in June which shows that the US housing market has not yet reached bottom. On Friday, The zero net growth in US jobs in August reinforced concerns that the US economy has stalled. Gold and silver were the only beneficiaries.
While two weeks ago, mounting speculation that the Fed is preparing a new round of monetary expansion helped the market regain its footing, last week both businesses and consumers were very worried by the slowdown in domestic economic activity, heightened financial market turmoil, ongoing serious concerns over the eurozone sovereign debt situation and increased fears over the health of the global economy. Investors fear that without further stimulus, the global economy will fall into recession.
Short term, the markets will have to jump the hurdle of this Wednesday's German Federal Constitutional court ruling on suits claiming Berlin is breaking German law and European treaties by contributing to multi-billion euro bailouts of Greece, Ireland and Portugal. Longer term, the result of the FEDS two day meeting on 20-21 September will greatly affect markets as the Federal Reserve are under pressure to provide more stimulus to aid the frail recovery.
Volatility is expected to continue until we know the outcome of these two important events.
Monday, August 29, 2011
Weekly Market Summary
by Raymond Chatlani
On Monday, Asian stocks gave up early gains and fell as fears that the U.S. is slipping back into recession caused investors to dump riskier assets. Gold hit a new all time high of over $1,890 an ounce. Bank shares crashed despite a widespread rally across Europe's major stock markets as questions were raised about their ability to fund themselves. US markets rose modestly on expectations of the Feds introducing another quantitive easing program.
On Tuesday, Asian markets extended gains after the Chinese flash PMI from HSBC, designed to preview China's factory output before official data, showed the index edging up to 49.8 in August from July's final reading of 49.3. That left the index just below the 50-point mark which separates expansion from contraction, but HSBC itself believes a reading as low as 48.0 in China would still point to an annual growth of 12-13 percent in industrial output and 9 percent in GDP. For the fourth straight session, gold hit another new all time high at 1,911 an ounce at one point as investors continued to fret about the health of the global economy. European stocks rose as manufacturing activity in Germany was better than expected, rising to 52 in August, compared with estimates for a reading of 50.8. US stockmarkets rose amid better-than-expected global manufacturing data and expectations that the Federal Reserve Chairman Ben Bernanke will discuss additional support for the U.S. economy during a conference on Friday.
On Wednesday, Asian shares fell despite a sharp rally on Wall Street the previous night as Moody's downgraded Japan's credit rating to Aa3 from Aa2, citing weak growth prospects for the world's No. 3 economy, massive government debt and constant political uncertainty. European stockmarkets rocketed as the European Central Bank's weekly dollar funding operation was not used on Wednesday, calming fears that euro zone banks are being increasingly blacklisted by U.S. money market funds because of their exposure to the region's debt crisis. US markets turned higher as a larger-than-anticipated rise in orders for durable goods bolstered the view that, while sluggish, the economy is not headed into recession.
On Thursday, Asian shares rose cheered by gains on Wall Street and gold continued to struggle after running into a wall of profit-taking. European stockmarkets ended lower after another volatile trading session, as talk of an imminent ban on short-selling in Germany, later denied, swept through equity markets. . US markets fell on weakness in industrial and technology shares as Apple Inc fell 2 percent to $368.75 a day after co-founder Steve Jobs resigned as chief executive, keeping the Nasdaq negative. Adding to tech woes, Applied Materials Inc fell 3.6 percent to $10.94 after warning Wednesday that fourth-quarter revenue could fall as much as 30 percent on plummeting demand.
On Friday, Asian stockmarkets fell marginally on jittery trading as investors waited to see if Bernanke offered more support for the U.S. economy when he delivers a highly anticipated speech at a conference later today in Jackson Hole, Wyoming. European markets fell on concerns about the debt crisis. Wall Street rose sharply after Federal Reserve Chairman Ben Bernanke said the U.S. was headed for long-term economic growth.
This morning, Asian stocks rose after US Federal Reserve Chairman Ben Bernanke left the door open for further action to stimulate the economy and fight high unemployment.
Last week, global markets rose modestly with commodities rising sharply except for oil. European shares were mixed as some markets fell due to the ongoing Eurozone crisis. The bigger picture here is that US Federal Reserve chairman Bernanke appears to have enough confidence that the economy is not going to worsen and so he thinks there is no need for a QE3 at this time. Federal Reserve Chairman Ben Bernanke also left the door open to new stimulus to help the U.S. economy and reduce unemployment.
We expect this volatility and lack of direction in the markets to continue during September as traders and fund managers will still be on holiday. If Bernanke does launch QE3 as expected this Autumn, then markets should recover their present summer losses.
On Monday, Asian stocks gave up early gains and fell as fears that the U.S. is slipping back into recession caused investors to dump riskier assets. Gold hit a new all time high of over $1,890 an ounce. Bank shares crashed despite a widespread rally across Europe's major stock markets as questions were raised about their ability to fund themselves. US markets rose modestly on expectations of the Feds introducing another quantitive easing program.
On Tuesday, Asian markets extended gains after the Chinese flash PMI from HSBC, designed to preview China's factory output before official data, showed the index edging up to 49.8 in August from July's final reading of 49.3. That left the index just below the 50-point mark which separates expansion from contraction, but HSBC itself believes a reading as low as 48.0 in China would still point to an annual growth of 12-13 percent in industrial output and 9 percent in GDP. For the fourth straight session, gold hit another new all time high at 1,911 an ounce at one point as investors continued to fret about the health of the global economy. European stocks rose as manufacturing activity in Germany was better than expected, rising to 52 in August, compared with estimates for a reading of 50.8. US stockmarkets rose amid better-than-expected global manufacturing data and expectations that the Federal Reserve Chairman Ben Bernanke will discuss additional support for the U.S. economy during a conference on Friday.
On Wednesday, Asian shares fell despite a sharp rally on Wall Street the previous night as Moody's downgraded Japan's credit rating to Aa3 from Aa2, citing weak growth prospects for the world's No. 3 economy, massive government debt and constant political uncertainty. European stockmarkets rocketed as the European Central Bank's weekly dollar funding operation was not used on Wednesday, calming fears that euro zone banks are being increasingly blacklisted by U.S. money market funds because of their exposure to the region's debt crisis. US markets turned higher as a larger-than-anticipated rise in orders for durable goods bolstered the view that, while sluggish, the economy is not headed into recession.
On Thursday, Asian shares rose cheered by gains on Wall Street and gold continued to struggle after running into a wall of profit-taking. European stockmarkets ended lower after another volatile trading session, as talk of an imminent ban on short-selling in Germany, later denied, swept through equity markets. . US markets fell on weakness in industrial and technology shares as Apple Inc fell 2 percent to $368.75 a day after co-founder Steve Jobs resigned as chief executive, keeping the Nasdaq negative. Adding to tech woes, Applied Materials Inc fell 3.6 percent to $10.94 after warning Wednesday that fourth-quarter revenue could fall as much as 30 percent on plummeting demand.
On Friday, Asian stockmarkets fell marginally on jittery trading as investors waited to see if Bernanke offered more support for the U.S. economy when he delivers a highly anticipated speech at a conference later today in Jackson Hole, Wyoming. European markets fell on concerns about the debt crisis. Wall Street rose sharply after Federal Reserve Chairman Ben Bernanke said the U.S. was headed for long-term economic growth.
This morning, Asian stocks rose after US Federal Reserve Chairman Ben Bernanke left the door open for further action to stimulate the economy and fight high unemployment.
Last week, global markets rose modestly with commodities rising sharply except for oil. European shares were mixed as some markets fell due to the ongoing Eurozone crisis. The bigger picture here is that US Federal Reserve chairman Bernanke appears to have enough confidence that the economy is not going to worsen and so he thinks there is no need for a QE3 at this time. Federal Reserve Chairman Ben Bernanke also left the door open to new stimulus to help the U.S. economy and reduce unemployment.
We expect this volatility and lack of direction in the markets to continue during September as traders and fund managers will still be on holiday. If Bernanke does launch QE3 as expected this Autumn, then markets should recover their present summer losses.
Friday, August 12, 2011
Weekly Market Summary
by Raymond Chatlani
On Monday, Asian shares fell and the dollar languished near a record low against the Swiss franc, as investors took fright at a downgrade of the U.S. credit rating, while gold powered to another new record high of $1,712 an ounce despite pledges by the G7 and the ECB. The falls continued although G7 finance ministers that they were "ready to take action to ensure stability and liquidity in markets" and the ECB said that it would "actively implement" its controversial bond-buying programme to fight the euro zone's debt crisis and actively start buying Spanish and Italian debt. European and US markets extended last week's rout with the Dow Jones industrial average ending 5.55 percent lower following Friday's historic downgrade of the U.S. AAA credit grade by ratings firm Standard & Poor's.
On Tuesday, Asian stockmarkets nosedived and the Swiss franc held near a record high, as investors dumped riskier assets in a global rout triggered by fears that political leaders are failing to tackle debt crises in Europe and the United States while gold hit a new high of $1,778 an ounce. The news that Chinese consumer prices in July rose 6.5 percent from a year earlier contributed to these falls, but Asian markets later staged a sharp rebound from early lows. European and US markets recovered after initially falling in a highly volatile session and closed into positive territory after the U.S. Federal Reserve promised to extend near-zero interest rates for two more years and said it would consider further steps to help growth..
On Wednesday, Asian stocks rebounded, following a jump in U.S. shares, after the Federal Reserve made an unprecedented pledge to keep interest rates near zero for at least two years, stemming a global equity rout for the time being. European markets got hammered on worries that the debt crisis in Europe is spilling in to France amid a weaker economic outlook in the United States. A storm of market questions on the financial solidity of a major French bank and talk of an impending downgrade of France's credit rating, all denied by authorities, rattled financial markets. Safe-haven buying lifted gold above $1,800 per ounce for the first time and oil rebounded from six month lows on Wedesday as confidence in the U.S. and euro zone economies eroded fast. U.S. stockmarkets also fell on fears about the French banking sector's exposure to shaky European debt and its possible spillover onto U.S. banks.
On Thursday, Asian stocks fell 1-2 percent as the fallout from Wall Street's 4 percent drop overnight was limited by a rise in U.S. stock futures, while gold climbed above $1,800 an ounce to a new record, reflecting fears over Europe's worsening financial crisis. European markets initially fell as French bank's shares prices and the cost of insuring Italian government bonds against default hit a record high and the country's stock market fell again as politicians raised doubts about Prime Minister Silvio Berlusconi's new austerity plan. However, European and US stockmarkets rose strongly as a strong U.S. jobs report trumped early concerns about French banks and fears that Europe's debt crisis will spread.
On Friday, Asian stocks edged up, as investors hunted for value after an intense week of volatility, though the festering European financial crisis may mean that havens like gold and the Swiss franc may still draw buyers. European markets rose as regulators of major European exchanges banned the short-selling of financial company shares, protecting them from downward pressure by speculators.Wall Street rose gently at the time of writing as traders dissected mixed reports on consumer sentiment, retail sales and business inventories. The government says that consumers spent more on autos, furniture and gasoline in July, pushing up retail sales by the largest amount in four months. But a survey on consumer sentiment fell to its lowest level in more than 30 years. And a separate report showed that businesses increased their stockpiles in July by the smallest amount since May 2010.
Another volatile week in the markets where investors continued to sell equities and commodities and seek safe havens such as gold, the Swiss Franc and US treasuries. This week gold breeched $1,800 an ounce temporarily. Besides last week's fears of a US slowdown and spikes of over 6 percent in Spanish and Italian bonds which were unsustainable, this week investors sold on rumours of a downgrade in France's credit rating and fears that Societe Generale may become insolvent and has to be bailed out by the French Government. French authorities denied this and markets bounced back today on the back of a ban on short selling of financial shares in many European markets, especially Spain, Italy and France.
Such volatility is expected to continue for a few weeks until it is clear whether the US economy will fall into recession again and if the Eurozone countries can muddle through the debt crisis.
On Monday, Asian shares fell and the dollar languished near a record low against the Swiss franc, as investors took fright at a downgrade of the U.S. credit rating, while gold powered to another new record high of $1,712 an ounce despite pledges by the G7 and the ECB. The falls continued although G7 finance ministers that they were "ready to take action to ensure stability and liquidity in markets" and the ECB said that it would "actively implement" its controversial bond-buying programme to fight the euro zone's debt crisis and actively start buying Spanish and Italian debt. European and US markets extended last week's rout with the Dow Jones industrial average ending 5.55 percent lower following Friday's historic downgrade of the U.S. AAA credit grade by ratings firm Standard & Poor's.
On Tuesday, Asian stockmarkets nosedived and the Swiss franc held near a record high, as investors dumped riskier assets in a global rout triggered by fears that political leaders are failing to tackle debt crises in Europe and the United States while gold hit a new high of $1,778 an ounce. The news that Chinese consumer prices in July rose 6.5 percent from a year earlier contributed to these falls, but Asian markets later staged a sharp rebound from early lows. European and US markets recovered after initially falling in a highly volatile session and closed into positive territory after the U.S. Federal Reserve promised to extend near-zero interest rates for two more years and said it would consider further steps to help growth..
On Wednesday, Asian stocks rebounded, following a jump in U.S. shares, after the Federal Reserve made an unprecedented pledge to keep interest rates near zero for at least two years, stemming a global equity rout for the time being. European markets got hammered on worries that the debt crisis in Europe is spilling in to France amid a weaker economic outlook in the United States. A storm of market questions on the financial solidity of a major French bank and talk of an impending downgrade of France's credit rating, all denied by authorities, rattled financial markets. Safe-haven buying lifted gold above $1,800 per ounce for the first time and oil rebounded from six month lows on Wedesday as confidence in the U.S. and euro zone economies eroded fast. U.S. stockmarkets also fell on fears about the French banking sector's exposure to shaky European debt and its possible spillover onto U.S. banks.
On Thursday, Asian stocks fell 1-2 percent as the fallout from Wall Street's 4 percent drop overnight was limited by a rise in U.S. stock futures, while gold climbed above $1,800 an ounce to a new record, reflecting fears over Europe's worsening financial crisis. European markets initially fell as French bank's shares prices and the cost of insuring Italian government bonds against default hit a record high and the country's stock market fell again as politicians raised doubts about Prime Minister Silvio Berlusconi's new austerity plan. However, European and US stockmarkets rose strongly as a strong U.S. jobs report trumped early concerns about French banks and fears that Europe's debt crisis will spread.
On Friday, Asian stocks edged up, as investors hunted for value after an intense week of volatility, though the festering European financial crisis may mean that havens like gold and the Swiss franc may still draw buyers. European markets rose as regulators of major European exchanges banned the short-selling of financial company shares, protecting them from downward pressure by speculators.Wall Street rose gently at the time of writing as traders dissected mixed reports on consumer sentiment, retail sales and business inventories. The government says that consumers spent more on autos, furniture and gasoline in July, pushing up retail sales by the largest amount in four months. But a survey on consumer sentiment fell to its lowest level in more than 30 years. And a separate report showed that businesses increased their stockpiles in July by the smallest amount since May 2010.
Another volatile week in the markets where investors continued to sell equities and commodities and seek safe havens such as gold, the Swiss Franc and US treasuries. This week gold breeched $1,800 an ounce temporarily. Besides last week's fears of a US slowdown and spikes of over 6 percent in Spanish and Italian bonds which were unsustainable, this week investors sold on rumours of a downgrade in France's credit rating and fears that Societe Generale may become insolvent and has to be bailed out by the French Government. French authorities denied this and markets bounced back today on the back of a ban on short selling of financial shares in many European markets, especially Spain, Italy and France.
Such volatility is expected to continue for a few weeks until it is clear whether the US economy will fall into recession again and if the Eurozone countries can muddle through the debt crisis.
Monday, August 8, 2011
Weekly Market Summary
By Raymond Chatlani
This morning, Asian stockmarkets rose after U.S. President Barack Obama said congressional leaders agreed to raise the nation's borrowing limit and avert a default by the world's top oil consumer. Both Euope and Wall Street fell as manufacturing activity barely grew in July, falling to the weakest level since just after the recession ended. The Institute for Supply Management, a trade group of purchasing executives, says its index of manufacturing activity fell to 50.9 percent in July from 55.3 percent in June. That's the lowest reading since July 2009, one month after the recession officially ended.
On Tuesday, Asian shares fell on concerns about the health of the global economy after sluggish U.S. manufacturing data. European markets hit their lowest close in 11 months as weak global growth replaced the U.S. debt ceiling row as investors' main concern and banks fell on worries about the euro zone peripheral debt crisis. Europe's sovereign debt crisis contributed to the gloom as Italian bond yields hit their highest in the euro's 11-year lifetime today .US stockmarkets fell as investors fretted about a possible credit downgrade amid concerns that economic growth could remain subdued. Many investors fear that even if the US debt ceiling is raised, the measures would not be enough to avoid a credit downgrade which will raise borrowing costs. Also, in the latest economic data, U.S. consumer spending fell unexpectedly in June to post the first decline in nearly two years as incomes barely rose, the government reported.
On Wednesday, Asian stockmarkets fell for a second successive day and safe haven assets such as gold and the Swiss franc shone as renewed fears about the health of the global economy rattled financial markets. Confirmation of a last-gasp deal to avoid a default by the United States failed to bring any relief, as investors focused instead on worries that major economies could slip back into recession amid weak data and Europe's festering debt crisis. Gold hit anew all time high of $1,662 an ounce. European markets fell on the back that the last three days in the USA, a weak manufacturing report has been delivered, fresh signs the US consumer is ailing and, yesterday, evidence the country’s services sector is slowing. For investors it opens a new front of worry besides Europe, where Italy and Spain are in the eye of the debt storm. Wall Street fell initially as U.S. service firms, which employ nearly 90 percent of the country's work force, experienced their weakest growth in 17 months in July, but finished in positive territory as investors saw value and scupped up beaten down shares. The report confirms other data that show the economy is struggling two years after the recession ended.
On Thursday, Asian stockmarkets mostly fell as worries about slowing global growth sapped investor enthusiasm. Markets are also awaiting results of a Spanish bond auction after yields on Spanish and Italian bonds jumped in recent sessions on fears those economies would be engulfed by debt problems. Gold hit another record new high of $1,678 an ounce. European and US markets fell and commodities tumbled, trampled by a global stampede away from riskier assets as investors panicked over mounting signs of a sluggish U.S. economy as the US Labor Department reported that weekly claims for unemployment benefits remained at a high 400,000 last week.
On Friday, Asian stocks dropped 3 to 4 percent after panic triggered the worst sell-off on Wall Street since the global financial crisis, sending investors slashing positions and scrambling for cash and government bonds. Initially, European stocks fell heavily as the selling continued although nonfarm payrolls increased 117,000, the US Labor Department said, above market expectations for an 85,000 gain. The unemployment rate dipped to 9.1 percent from 9.2 percent in June, mostly the result of people leaving the labor force. Wall Street rallied at the open but closed mixed as S & P lowered the USA's credit rating to AA+ from AAA.
This morning, Asian shares fell and the dollar languished near a record low against the Swiss franc, as investors took fright at a downgrade of the U.S. credit rating, while gold powered to another new record high of $1,712 an ounce despite pledges by the G7 and the ECB. The falls continued although G7 finance ministers that they were "ready to take action to ensure stability and liquidity in markets" and the ECB said that it would "actively implement" its controversial bond-buying programme to fight the euro zone's debt crisis and actively start buying Spanish and Italian debt..
The worst week for global markets since 2008 as investors fear that the US may enter into recession and that Eurozone countries will be unable to rollover their debts at reasonable interest rates. Last week we saw a flight to safety as equities tanked and investors sought safe havens such as the Swiss Franc, US treasuries and gold.
In the US, in the past two weeks, we have seen consumer spending and private sector employment fall, a weak manufacturing report and lower durable goods orders and the US debt ceiling was raised as the US Government pledged to cut the US deficit which means that there will be no spending on economic stimulus. Also, the Federal Reserve is reluctant to do anything more. Without much to invigorate growth, the US economy may be in danger of slipping into a stupor like the one Japan has failed to shake off for more than a decade, so Wall Street is spooked.
Italian and Spanish bond rates rose above 6 percent which is unsustainable as investors panicked and started to dump them. Clearly, the second Greek bailout two weeks ago did nothing to calm the markets. The S & P downgrade of the US credit rating to AA+ on Friday affected Asian markets this morning and US futures are well down.
Markets may continue to fall for a number of weeks until investors are reassured that Government authorities will ensure that there is ample liquidity in the markets. Many analysts believe that there will be great opportunities in certain sectors of the markets when this correction is eventually over. Across the world company fundamentals are in much better shape than three years ago. Firms have cut costs, borrowings are a lot lower and growth seems to be returning across a number of sectors.
This morning, Asian stockmarkets rose after U.S. President Barack Obama said congressional leaders agreed to raise the nation's borrowing limit and avert a default by the world's top oil consumer. Both Euope and Wall Street fell as manufacturing activity barely grew in July, falling to the weakest level since just after the recession ended. The Institute for Supply Management, a trade group of purchasing executives, says its index of manufacturing activity fell to 50.9 percent in July from 55.3 percent in June. That's the lowest reading since July 2009, one month after the recession officially ended.
On Tuesday, Asian shares fell on concerns about the health of the global economy after sluggish U.S. manufacturing data. European markets hit their lowest close in 11 months as weak global growth replaced the U.S. debt ceiling row as investors' main concern and banks fell on worries about the euro zone peripheral debt crisis. Europe's sovereign debt crisis contributed to the gloom as Italian bond yields hit their highest in the euro's 11-year lifetime today .US stockmarkets fell as investors fretted about a possible credit downgrade amid concerns that economic growth could remain subdued. Many investors fear that even if the US debt ceiling is raised, the measures would not be enough to avoid a credit downgrade which will raise borrowing costs. Also, in the latest economic data, U.S. consumer spending fell unexpectedly in June to post the first decline in nearly two years as incomes barely rose, the government reported.
On Wednesday, Asian stockmarkets fell for a second successive day and safe haven assets such as gold and the Swiss franc shone as renewed fears about the health of the global economy rattled financial markets. Confirmation of a last-gasp deal to avoid a default by the United States failed to bring any relief, as investors focused instead on worries that major economies could slip back into recession amid weak data and Europe's festering debt crisis. Gold hit anew all time high of $1,662 an ounce. European markets fell on the back that the last three days in the USA, a weak manufacturing report has been delivered, fresh signs the US consumer is ailing and, yesterday, evidence the country’s services sector is slowing. For investors it opens a new front of worry besides Europe, where Italy and Spain are in the eye of the debt storm. Wall Street fell initially as U.S. service firms, which employ nearly 90 percent of the country's work force, experienced their weakest growth in 17 months in July, but finished in positive territory as investors saw value and scupped up beaten down shares. The report confirms other data that show the economy is struggling two years after the recession ended.
On Thursday, Asian stockmarkets mostly fell as worries about slowing global growth sapped investor enthusiasm. Markets are also awaiting results of a Spanish bond auction after yields on Spanish and Italian bonds jumped in recent sessions on fears those economies would be engulfed by debt problems. Gold hit another record new high of $1,678 an ounce. European and US markets fell and commodities tumbled, trampled by a global stampede away from riskier assets as investors panicked over mounting signs of a sluggish U.S. economy as the US Labor Department reported that weekly claims for unemployment benefits remained at a high 400,000 last week.
On Friday, Asian stocks dropped 3 to 4 percent after panic triggered the worst sell-off on Wall Street since the global financial crisis, sending investors slashing positions and scrambling for cash and government bonds. Initially, European stocks fell heavily as the selling continued although nonfarm payrolls increased 117,000, the US Labor Department said, above market expectations for an 85,000 gain. The unemployment rate dipped to 9.1 percent from 9.2 percent in June, mostly the result of people leaving the labor force. Wall Street rallied at the open but closed mixed as S & P lowered the USA's credit rating to AA+ from AAA.
This morning, Asian shares fell and the dollar languished near a record low against the Swiss franc, as investors took fright at a downgrade of the U.S. credit rating, while gold powered to another new record high of $1,712 an ounce despite pledges by the G7 and the ECB. The falls continued although G7 finance ministers that they were "ready to take action to ensure stability and liquidity in markets" and the ECB said that it would "actively implement" its controversial bond-buying programme to fight the euro zone's debt crisis and actively start buying Spanish and Italian debt..
The worst week for global markets since 2008 as investors fear that the US may enter into recession and that Eurozone countries will be unable to rollover their debts at reasonable interest rates. Last week we saw a flight to safety as equities tanked and investors sought safe havens such as the Swiss Franc, US treasuries and gold.
In the US, in the past two weeks, we have seen consumer spending and private sector employment fall, a weak manufacturing report and lower durable goods orders and the US debt ceiling was raised as the US Government pledged to cut the US deficit which means that there will be no spending on economic stimulus. Also, the Federal Reserve is reluctant to do anything more. Without much to invigorate growth, the US economy may be in danger of slipping into a stupor like the one Japan has failed to shake off for more than a decade, so Wall Street is spooked.
Italian and Spanish bond rates rose above 6 percent which is unsustainable as investors panicked and started to dump them. Clearly, the second Greek bailout two weeks ago did nothing to calm the markets. The S & P downgrade of the US credit rating to AA+ on Friday affected Asian markets this morning and US futures are well down.
Markets may continue to fall for a number of weeks until investors are reassured that Government authorities will ensure that there is ample liquidity in the markets. Many analysts believe that there will be great opportunities in certain sectors of the markets when this correction is eventually over. Across the world company fundamentals are in much better shape than three years ago. Firms have cut costs, borrowings are a lot lower and growth seems to be returning across a number of sectors.
Monday, August 1, 2011
Weekly Market Summary
by Raymond Chatlani
On Monday, gold hit a record high above $1,620 an ounce, while the dollar steadied and Asian stocks slipped as investors piled into bullion over fears of a possible U.S. debt default as the debt ceiling talks in Washington stalled. Financials led european stockmarkets down on US debt concerns. US markets fell as political brinkmanship in Washington over the debt ceiling sparked fears of a U.S. rating downgrade. Gold surged to another record high, while oil and other commodities fell as the countdown for the United States to reach a debt deal or face a disastrous default drove investors into safer assets.
On Tuesday, Asian shares edged higher, bouncing back from a slide the previous day, after U.S. stocks posted only modest losses in reaction to the worsening deadlock in Washington over raising the debt limit and avoiding a technical bond default. Commodities rose broadly on Tuesday, with copper and corn outperforming the pack, as fear of a U.S. credit default sank the dollar and investors sought assets that could preserve value. European and US stockmarkets fell on a stalemate in US debt talks.
On Wednesday, Asian stocks rebounded and the U.S. dollar fell while gold hit a record high at more than $1,624 an ounce, as a drip feed of news out of Washington indicated politicians were making little progress on a plan to lift the U.S. debt ceiling. European markets fell for a third day as Italian banks tumbled in Milan as the Eurozone debt crisis resurfaced as Spain and Italy's borrowing costs marched back towards euro-era highs. Analysts said that this is due to Merkel's failure to confirm the bail-out plans until "after the parliamentary summer break". US stockmarkets fell amid continued gridlock for lawmakers debating how to avoid a debt default and a weak report on orders for manufactured goods. The government said that orders for durable goods fell 2.1 percent in June because of a drop in orders for commercial aircraft, automobiles and heavy machinery.
On Thursday, Asian markets tumbled following big losses on Wall Street, as the deadline approaches for US lawmakers to strike a deal to avoid a disastrous default. The White House and Democrats and their Republican rivals continue to bicker over a deficit-slashing plan that would allow a hike in the US debt ceiling, despite the government running out of money to pay its bills within a week. European shares fell for a fourth straight session to hit a one-week low as disappointing earnings and cautious comments from major European companies raised concerns about corporate profits. US stockmarkets fell as a stalemate continued over the U.S. debt limit even though there was a strong jobs report. The number of Americans claiming new unemployment benefits last week dropped below the 400,000 level for the first time since early April, a hopeful sign for the economy which has struggled to regain momentum.
On Friday, Asian stockmarkets fell as U.S. lawmakers squabbled over a compromise to avoid an unprecedented debt default, while growing worries about Europe's debt crisis weighed on the euro, adding to investor wariness. European markets fell after Moody's threatend to downgrade Spanish, adding to concerns that a Greek rescue package has done little to halt the spread of the eurozone debt crisis. Wall Street fell to post its worst weekly losses in nearly a year after data showed meager growth in the economy and debt deal deadlock kept investors nervous. The economy expanded at meager 1.3 percent annual rate in the spring after scarcely growing at all in the first three months of the year, the Commerce Department said Friday. Gold hit a new high of $1,632 an ounce.
This morning, Asian stockmarkets rose after U.S. President Barack Obama said congressional leaders agreed to raise the nation's borrowing limit and avert a default by the world's top oil consumer.
Last week, global markets fell significantly on fears of US lawmakers failing to lift the country's $14.3 trillion borrowing ceiling and risking a default and possible downgrade of its prized AAA credit rating as investors lost appetite for risky assets. Also, throughout last week's increasingly intense showdown in Washington over the U.S. debt ceiling, the spreads of Italian and Spanish bond yields over Germany widened sharply, signifying persistent unease that Greece's problem may spread to other European countries. Investors flocked to gold as a safe haven which hit a new record high of $1,632 an ounce on Friday.
This morning's news that the US debt ceiling will be raised should be positive for markets this week but will depend on whatever fiscal accord have been agreed. Details of this agreement will be revealed later today and tomorrow. European and US futures are already up and gold fell one percent this morning as investors are seeking riskier assets in anticipation of this new accord passing both the Senate and the House.
On Monday, gold hit a record high above $1,620 an ounce, while the dollar steadied and Asian stocks slipped as investors piled into bullion over fears of a possible U.S. debt default as the debt ceiling talks in Washington stalled. Financials led european stockmarkets down on US debt concerns. US markets fell as political brinkmanship in Washington over the debt ceiling sparked fears of a U.S. rating downgrade. Gold surged to another record high, while oil and other commodities fell as the countdown for the United States to reach a debt deal or face a disastrous default drove investors into safer assets.
On Tuesday, Asian shares edged higher, bouncing back from a slide the previous day, after U.S. stocks posted only modest losses in reaction to the worsening deadlock in Washington over raising the debt limit and avoiding a technical bond default. Commodities rose broadly on Tuesday, with copper and corn outperforming the pack, as fear of a U.S. credit default sank the dollar and investors sought assets that could preserve value. European and US stockmarkets fell on a stalemate in US debt talks.
On Wednesday, Asian stocks rebounded and the U.S. dollar fell while gold hit a record high at more than $1,624 an ounce, as a drip feed of news out of Washington indicated politicians were making little progress on a plan to lift the U.S. debt ceiling. European markets fell for a third day as Italian banks tumbled in Milan as the Eurozone debt crisis resurfaced as Spain and Italy's borrowing costs marched back towards euro-era highs. Analysts said that this is due to Merkel's failure to confirm the bail-out plans until "after the parliamentary summer break". US stockmarkets fell amid continued gridlock for lawmakers debating how to avoid a debt default and a weak report on orders for manufactured goods. The government said that orders for durable goods fell 2.1 percent in June because of a drop in orders for commercial aircraft, automobiles and heavy machinery.
On Thursday, Asian markets tumbled following big losses on Wall Street, as the deadline approaches for US lawmakers to strike a deal to avoid a disastrous default. The White House and Democrats and their Republican rivals continue to bicker over a deficit-slashing plan that would allow a hike in the US debt ceiling, despite the government running out of money to pay its bills within a week. European shares fell for a fourth straight session to hit a one-week low as disappointing earnings and cautious comments from major European companies raised concerns about corporate profits. US stockmarkets fell as a stalemate continued over the U.S. debt limit even though there was a strong jobs report. The number of Americans claiming new unemployment benefits last week dropped below the 400,000 level for the first time since early April, a hopeful sign for the economy which has struggled to regain momentum.
On Friday, Asian stockmarkets fell as U.S. lawmakers squabbled over a compromise to avoid an unprecedented debt default, while growing worries about Europe's debt crisis weighed on the euro, adding to investor wariness. European markets fell after Moody's threatend to downgrade Spanish, adding to concerns that a Greek rescue package has done little to halt the spread of the eurozone debt crisis. Wall Street fell to post its worst weekly losses in nearly a year after data showed meager growth in the economy and debt deal deadlock kept investors nervous. The economy expanded at meager 1.3 percent annual rate in the spring after scarcely growing at all in the first three months of the year, the Commerce Department said Friday. Gold hit a new high of $1,632 an ounce.
This morning, Asian stockmarkets rose after U.S. President Barack Obama said congressional leaders agreed to raise the nation's borrowing limit and avert a default by the world's top oil consumer.
Last week, global markets fell significantly on fears of US lawmakers failing to lift the country's $14.3 trillion borrowing ceiling and risking a default and possible downgrade of its prized AAA credit rating as investors lost appetite for risky assets. Also, throughout last week's increasingly intense showdown in Washington over the U.S. debt ceiling, the spreads of Italian and Spanish bond yields over Germany widened sharply, signifying persistent unease that Greece's problem may spread to other European countries. Investors flocked to gold as a safe haven which hit a new record high of $1,632 an ounce on Friday.
This morning's news that the US debt ceiling will be raised should be positive for markets this week but will depend on whatever fiscal accord have been agreed. Details of this agreement will be revealed later today and tomorrow. European and US futures are already up and gold fell one percent this morning as investors are seeking riskier assets in anticipation of this new accord passing both the Senate and the House.
Tuesday, July 26, 2011
Weekly Market Summary
by Raymond Chatlani
On Monday, Asian markets fell modestly on worries about Europe's banking woes and debt problems in the U.S. European stockmarkets continued to fall on sovereign debt woes and last Friday's stress tests with banks' share prices falling heavily. Mounting fears that politicians will fail to resolve the eurorozone's debt crisis sent markets sliding and Spain and Italy's borrowing costs nearing the "point of no return". The yields, or returns, on Spanish and Italian 10-year government debt hit euro-era highs over 6pc as investors demanded greater reward to shoulder the risk. Investors are unconvinced that the euro-sharing nations will manage to reach agreement on a second bail-out for Greece before Thursday's crunch summit in Brussels. US markets fell over Europe's banking troubles and an impasse over lifting the U.S. government's borrowing limit with gold breeching a new all time high above $1,600 an ounce and silver over $40 an ounce on safe haven demand.
On Tuesday, Asian stockmarkets continued to fall on sovereign debt fears. European markets bounced back led by banks but caution remained ahead of a crucial summit on Thursday where eurozone leaders will try to agree on a second rescue package for debt-stricken Greece. US markets rose as a strong quarterly report from IBM and Coca-Cola and a surge in housing starts sparked investor optimism a day after a selloff. Housing starts topped forecasts in June to touch a six-month high, and permits for future construction unexpectedly increased, the government reported. Also, President Barack Obama backed a proposal by six senators that would cut debt by $3.7 trillion over the next decade and raise the country's $14.3 trillion debt ceiling.
On Wednesday, Asian shares rose as indications of progress on a U.S. budget-reduction deal boosted investor confidence while encouraging quarterly numbers from Apple Inc and International Business Machines Corp helped Asia's beaten-down tech sector gain for a second day. European markets rose boosted by gains in Asia and overnight on Wall Street, as investors assessed global debt concerns. US stockmarkets closed nearly unchanged as the oncoming debt ceiling deadline overshadowed strong earnings from Apple Inc. Apple hit another all-time high one day after the maker of the iPhone and iPad reported quarterly revenues that far exceeded expectationsinvestors sat on their hands amid the unresolved debt ceiling crisis in Washington as the White House and Congress were negotiating a deal to raise the U.S. debt ceiling before a looming default on Aug. 2.
On Thursday, Asian stockmarkets mostly fell as poor manufacturing data on top copper consumer China countered optimism about progress in resolving debt woes in Europe and the United States as it suggests that the Chinese economy is slowing down. European and US markets surged as EU leaders agreed on a package to rescue Greece. The Greek economy will get an injection of 109bn euros (£95.9bn) with more from the private sector in the coming decades.
On Friday, Asian stockmarkets rose after European leaders agreed on a package to rescue debt-stricken Greece and gains will be sustained if U.S. policymakers also manage to cobble together a last minute deal. European markets rose on the Greek bailout package. US indices closed mixed as Caterpillar's profit missed estimates, offsetting a strong report from GE and an agreement on a Greece rescue package.
This morning, Gold hit a record high above $1,620 an ounce, while the dollar steadied and Asian stocks slipped as investors piled into bullion over fears of a possible U.S. debt default as the debt ceiling talks in Washington stalled.
Last week, global markets fell early in the week on Greek default concerns and fears that the US debt ceiling would not be raised. This all turned around on Thursday when EU leaders agreed to inject 109bn euros (£95.9bn) into the Greek economy with more from the private sector in the coming decades. Investors also became optimistic that US policymakers would reach an agreement to raise the US debt ceiling in time.
Commodities gained last week as precious metals such as gold and silver were purchased as safe havens. Oil also hit a three week high on optimism that Europe was tackling its huge debt problem while agricultural markets rallied on worries about the impact of excessive summer heat on crops.
This week, US corporate earnings should continue to be positive but markets may still fall if no comprise is reached to raise the US debt ceiling.
On Monday, Asian markets fell modestly on worries about Europe's banking woes and debt problems in the U.S. European stockmarkets continued to fall on sovereign debt woes and last Friday's stress tests with banks' share prices falling heavily. Mounting fears that politicians will fail to resolve the eurorozone's debt crisis sent markets sliding and Spain and Italy's borrowing costs nearing the "point of no return". The yields, or returns, on Spanish and Italian 10-year government debt hit euro-era highs over 6pc as investors demanded greater reward to shoulder the risk. Investors are unconvinced that the euro-sharing nations will manage to reach agreement on a second bail-out for Greece before Thursday's crunch summit in Brussels. US markets fell over Europe's banking troubles and an impasse over lifting the U.S. government's borrowing limit with gold breeching a new all time high above $1,600 an ounce and silver over $40 an ounce on safe haven demand.
On Tuesday, Asian stockmarkets continued to fall on sovereign debt fears. European markets bounced back led by banks but caution remained ahead of a crucial summit on Thursday where eurozone leaders will try to agree on a second rescue package for debt-stricken Greece. US markets rose as a strong quarterly report from IBM and Coca-Cola and a surge in housing starts sparked investor optimism a day after a selloff. Housing starts topped forecasts in June to touch a six-month high, and permits for future construction unexpectedly increased, the government reported. Also, President Barack Obama backed a proposal by six senators that would cut debt by $3.7 trillion over the next decade and raise the country's $14.3 trillion debt ceiling.
On Wednesday, Asian shares rose as indications of progress on a U.S. budget-reduction deal boosted investor confidence while encouraging quarterly numbers from Apple Inc and International Business Machines Corp helped Asia's beaten-down tech sector gain for a second day. European markets rose boosted by gains in Asia and overnight on Wall Street, as investors assessed global debt concerns. US stockmarkets closed nearly unchanged as the oncoming debt ceiling deadline overshadowed strong earnings from Apple Inc. Apple hit another all-time high one day after the maker of the iPhone and iPad reported quarterly revenues that far exceeded expectationsinvestors sat on their hands amid the unresolved debt ceiling crisis in Washington as the White House and Congress were negotiating a deal to raise the U.S. debt ceiling before a looming default on Aug. 2.
On Thursday, Asian stockmarkets mostly fell as poor manufacturing data on top copper consumer China countered optimism about progress in resolving debt woes in Europe and the United States as it suggests that the Chinese economy is slowing down. European and US markets surged as EU leaders agreed on a package to rescue Greece. The Greek economy will get an injection of 109bn euros (£95.9bn) with more from the private sector in the coming decades.
On Friday, Asian stockmarkets rose after European leaders agreed on a package to rescue debt-stricken Greece and gains will be sustained if U.S. policymakers also manage to cobble together a last minute deal. European markets rose on the Greek bailout package. US indices closed mixed as Caterpillar's profit missed estimates, offsetting a strong report from GE and an agreement on a Greece rescue package.
This morning, Gold hit a record high above $1,620 an ounce, while the dollar steadied and Asian stocks slipped as investors piled into bullion over fears of a possible U.S. debt default as the debt ceiling talks in Washington stalled.
Last week, global markets fell early in the week on Greek default concerns and fears that the US debt ceiling would not be raised. This all turned around on Thursday when EU leaders agreed to inject 109bn euros (£95.9bn) into the Greek economy with more from the private sector in the coming decades. Investors also became optimistic that US policymakers would reach an agreement to raise the US debt ceiling in time.
Commodities gained last week as precious metals such as gold and silver were purchased as safe havens. Oil also hit a three week high on optimism that Europe was tackling its huge debt problem while agricultural markets rallied on worries about the impact of excessive summer heat on crops.
This week, US corporate earnings should continue to be positive but markets may still fall if no comprise is reached to raise the US debt ceiling.
Monday, July 18, 2011
Weekly Market Summary
By Raymond Chatlani
This morning, Asian stockmarkets tumbled on Friday's poor US jobs report and today's emergency ECB meeting over the debt crisis. European shares dropped as mounting signs the region's debt crisis was spreading to Italy hammered euro zone peripheral stocks, taking a key stockmarket index to a two-week low and below an important support level. Shares of financial institutions were among the worst hit. Wall Street dived as renewed jitters about Europe's debt crisis and the global economy overshadowed the start of earnings season.
On Tuesday, Asian stockmarkets fell again on Europe's spreading debt crisis as Italian Government bond prices continued to fall. European indices fell for a third day as moves by officials to stem the European debt crisis failed to allay concerns that the risk was spreading to Italy and Spain. US markets fell as the U.S. trade gap widened sharply in May to its highest level in nearly three years as surging oil prices helped push imports to a near record and exports fell slightly from April's all-time high and as Ireland's beleaguered economy suffered another blow as Moody's cut its credit rating to junk status on fears that it will need further bail-outs.The country joins Portugal and Greece to become the third euro-area nation to be reduced to non-investment grade.
On Wednesday, Asian markets rebounded higher as China's rapid economic growth slowed in the latest quarter to a still robust 9.5pc, easing fears of an abrupt slowdown and giving Beijing room to tighten controls to fight surging inflation. Economic growth slowed slightly from 9.7pc in the January-March quarter following repeated interest rate rises and other controls, data showed on Wednesday. Factory output rebounded and retail sales grew by double digits. European stockmarkets were lifted by upbeat Chinese growth data. Wall Street closed higher after Fed Chairman Ben Bernanke suggested the Fed would consider additional measures to support the economy if the outlook gets worse, but the market is likely to get hit in the coming session after Moody's said it could cut the United States' prized triple-A credit rating. Gold hit record highs on safe-haven buying linked to the European debt crisis and a dollar weakened by hints of more economic stimulus from the Federal Reserve, while supply concerns drove most other commodities higher.
On Thursday, Asian stockmarkets fell modestly on fears that America ratings would be cut from AAA. Spot gold hit a record high $1,594 an ounce, buoyed by a sharp drop in the dollar after Moody's warned the U.S. may lose its top credit rating, the possibility of more Federal Reserve stimulus and Europe's deepening debt crisis. Both European and US markets fell on fears of the spreading Eurozone debt crisis and possible cut to the US credit rating although U.S. retail sales unexpectedly rose in June while weekly jobless claims dropped by a surprisingly large 22,000 to 405,000..
On Friday, Asian stockmarkets closed mixed although ratings agency Standard & Poor's has warned there is a one-in-two chance it could cut the United States' prized triple-A rating if a deal on raising the government's debt ceiling is not agreed soon. This is the second ratings agency that may cut the US credit rating. European markets closed lower as eight of 90 European banks failed the stress test. Wall Street advanced on strong corporate results from Citigroup and Google which offset a rash of weak U.S. economic data. Most major commodities rose on Friday, reversing the previous session's losses, as forecasts for hot weather drove up energy and agriculture prices and mounting fears about debt defaults lured investors into gold.
This morning, Asian markets fell modestly on worries about Europe's banking woes and debt problems in the U.S.
Last week, global markets fell as the ongoing debt crises in the U.S. and the euro zone kept investors from adding to their risky assets. The results of stress tests on European banks that were released after the close of trading Friday overshadowed the start of this week's trading in Asia. The results did little to reassure investor confidence in the continent's shaky financial sector, revealing that eight of 90 European banks flunked tests aimed at revealing how they would fare in another recession. Another 16 barely passed.
Investors are also unsettled by the inability of U.S. politicians to work out a deal to avoid a debt default before a deadline that is just two weeks away.
With policymakers on both sides of the Atlantic offering no clear solutions to the markets on their respective debt problems, risk-averse investors are expected to continue piling up perceived safe-haven instruments like gold which hit a record high of $ 1,598 an ounce this morning and bonds.
In the coming days there is likely to be volatility as the market grapples with these major issues. Earnings reports from US companies this week, even if positive may not lift the markets as investors focus on sovereign debt issues while commodities may continue to gain.
This morning, Asian stockmarkets tumbled on Friday's poor US jobs report and today's emergency ECB meeting over the debt crisis. European shares dropped as mounting signs the region's debt crisis was spreading to Italy hammered euro zone peripheral stocks, taking a key stockmarket index to a two-week low and below an important support level. Shares of financial institutions were among the worst hit. Wall Street dived as renewed jitters about Europe's debt crisis and the global economy overshadowed the start of earnings season.
On Tuesday, Asian stockmarkets fell again on Europe's spreading debt crisis as Italian Government bond prices continued to fall. European indices fell for a third day as moves by officials to stem the European debt crisis failed to allay concerns that the risk was spreading to Italy and Spain. US markets fell as the U.S. trade gap widened sharply in May to its highest level in nearly three years as surging oil prices helped push imports to a near record and exports fell slightly from April's all-time high and as Ireland's beleaguered economy suffered another blow as Moody's cut its credit rating to junk status on fears that it will need further bail-outs.The country joins Portugal and Greece to become the third euro-area nation to be reduced to non-investment grade.
On Wednesday, Asian markets rebounded higher as China's rapid economic growth slowed in the latest quarter to a still robust 9.5pc, easing fears of an abrupt slowdown and giving Beijing room to tighten controls to fight surging inflation. Economic growth slowed slightly from 9.7pc in the January-March quarter following repeated interest rate rises and other controls, data showed on Wednesday. Factory output rebounded and retail sales grew by double digits. European stockmarkets were lifted by upbeat Chinese growth data. Wall Street closed higher after Fed Chairman Ben Bernanke suggested the Fed would consider additional measures to support the economy if the outlook gets worse, but the market is likely to get hit in the coming session after Moody's said it could cut the United States' prized triple-A credit rating. Gold hit record highs on safe-haven buying linked to the European debt crisis and a dollar weakened by hints of more economic stimulus from the Federal Reserve, while supply concerns drove most other commodities higher.
On Thursday, Asian stockmarkets fell modestly on fears that America ratings would be cut from AAA. Spot gold hit a record high $1,594 an ounce, buoyed by a sharp drop in the dollar after Moody's warned the U.S. may lose its top credit rating, the possibility of more Federal Reserve stimulus and Europe's deepening debt crisis. Both European and US markets fell on fears of the spreading Eurozone debt crisis and possible cut to the US credit rating although U.S. retail sales unexpectedly rose in June while weekly jobless claims dropped by a surprisingly large 22,000 to 405,000..
On Friday, Asian stockmarkets closed mixed although ratings agency Standard & Poor's has warned there is a one-in-two chance it could cut the United States' prized triple-A rating if a deal on raising the government's debt ceiling is not agreed soon. This is the second ratings agency that may cut the US credit rating. European markets closed lower as eight of 90 European banks failed the stress test. Wall Street advanced on strong corporate results from Citigroup and Google which offset a rash of weak U.S. economic data. Most major commodities rose on Friday, reversing the previous session's losses, as forecasts for hot weather drove up energy and agriculture prices and mounting fears about debt defaults lured investors into gold.
This morning, Asian markets fell modestly on worries about Europe's banking woes and debt problems in the U.S.
Last week, global markets fell as the ongoing debt crises in the U.S. and the euro zone kept investors from adding to their risky assets. The results of stress tests on European banks that were released after the close of trading Friday overshadowed the start of this week's trading in Asia. The results did little to reassure investor confidence in the continent's shaky financial sector, revealing that eight of 90 European banks flunked tests aimed at revealing how they would fare in another recession. Another 16 barely passed.
Investors are also unsettled by the inability of U.S. politicians to work out a deal to avoid a debt default before a deadline that is just two weeks away.
With policymakers on both sides of the Atlantic offering no clear solutions to the markets on their respective debt problems, risk-averse investors are expected to continue piling up perceived safe-haven instruments like gold which hit a record high of $ 1,598 an ounce this morning and bonds.
In the coming days there is likely to be volatility as the market grapples with these major issues. Earnings reports from US companies this week, even if positive may not lift the markets as investors focus on sovereign debt issues while commodities may continue to gain.
Monday, July 11, 2011
Weekly Market Summary
by Raymond Chatlani
On Monday, Asian stocks climbed and the euro inched higher after policymakers approved an emergency tranche of funding for Greece, offering a lifeline to the debt-stricken nation while strong U.S. data also boosted demand for risky assets. Euro zone finance ministers on Saturday approved a 12 billion euro instalment of Greece's bailout and said details of a second aid package for Athens would be finalised by mid-September. European markets mostly rose as worries about Greece receded further. Volume was low, at 56.6 percent of the index's 90-day average, with no direction provided by Wall Street, closed for the Independence Day holiday.
On Tuesday, Asian stockmarkets mostly fell modestly after rating agency Moody's said China's local government debt burden may be 3.5 trillion yuan ($540 billion) larger than auditors estimated, putting banks on the hook for deeper losses. European markets rose modestly on low volume. US stocks were little changed as concerns about further monetary tightening in China and soft euro-zone economic data made investors cautious.
On Wednesday, Asian stockmarkets fell after Moody's slashed Portugal's credit rating to junk status, reigniting fears that it may need a second rescue package. European markets fell on the Portugese downgrade and China's interest rate rise sparked jitters about global growth prospects. China's central bank increased interest rates for the third time this year today, making clear that taming inflation is a top priority as its economy gently slows. Although Portugal's credit downgrade pressured global stocks and China's rate hike weighed on commodities, Wall Street paid little heed and pushed shares higher.
On Thursday, Asian stockmarkets rose as investors judged that the People's Bank of China is getting closer to taking a break from its multiple increases in policy rates and bank reserve requirements as the economy shows signs of losing steam. European indexes rose after the ECB raised interest by a quarter percent to 1.5 percent as expected by investors and on improved US labour data. US markets rose after data showed an improvement in the labor market ahead of Friday's key U.S. government monthly payrolls report and as retail sales came in stronger than expected, raising hopes that economic recovery was gaining traction. A report by payrolls processor ADP showed U.S. private hiring increased by 157,000 in June, well above the expected 68,000, bouncing back from a surprise slump the month before. A separate report from the Labor Department showed initial claims for state unemployment benefits dropped 14,000 to a seasonally adjusted 418,000 last week. The decline was more than economists's expectations for a fall to 420,000.
On Friday, Asian markets rose following good labour and retail sales data in the US the previous evening. Both European markets and Wall Street fell after the government said businesses added the fewest jobs in more than a year in June and the unemployment rate rose to 9.2 percent and on fears that the eurozone's debt crisis will engulf Italy. The US economy generated a net 18,000 new jobs in June, and the number of jobs added in May was revised down to 25,000, the Labor Department said. Italy's benchmark index, the FTSE Mib, closed 3.5pc down amid worries that political jostling in Rome threatens the country's fiscal stability. The flight from Italian government debt saw the yield, or return, on its 10-year bonds touch 5.3pc, a euro-era high.
This morning, Asian stockmarkets fell on Friday's poor US jobs report and today's emergency ECB meeting over the debt crisis. Australia tumbled the most as it was unveiled on Sunday that the 500 worst polluters are to pay 23 Australian dollars ($25) for every ton of carbon dioxide they emit, with the government promising to compensate households hit with higher power bills under a plan to reduce greenhouse gas emissions.
Last week, global markets rose for a third consecutive week with commodities continuing their appreciation in price. The resolution of the Greek debt crisis and investors perception that China would bring inflation under control by the last quarter of 2011 were the main catalysts for these rises.
However, markets fell on Friday on the low number of jobs created in the US during June and fears that after Greece and Ireland that Italy will be the next country that will have a fiscal crisis.
Investors are worried that Giulio Tremonti, Italy's finance minister, is threatened by corruption accusations against a former aide and seems to have lost the support of his prime minister Silvio Berlusconi. The fear is that if Mr Tremonti is forced out of government it could derail the austerity measures he has pushed through to bring down Italy's huge debt, which amounts to around 120pc of its GDP. That would leave Italy in greater danger of being sucked into the turmoil which overtook Greece and Portugal, as doubts about their finances saw them shut out of the international debt markets.
This week markets will be focusing on this morning's emergency ECB meeting over how to stop contaign spreading to Italy and US second quarter corporate earnings.
On Monday, Asian stocks climbed and the euro inched higher after policymakers approved an emergency tranche of funding for Greece, offering a lifeline to the debt-stricken nation while strong U.S. data also boosted demand for risky assets. Euro zone finance ministers on Saturday approved a 12 billion euro instalment of Greece's bailout and said details of a second aid package for Athens would be finalised by mid-September. European markets mostly rose as worries about Greece receded further. Volume was low, at 56.6 percent of the index's 90-day average, with no direction provided by Wall Street, closed for the Independence Day holiday.
On Tuesday, Asian stockmarkets mostly fell modestly after rating agency Moody's said China's local government debt burden may be 3.5 trillion yuan ($540 billion) larger than auditors estimated, putting banks on the hook for deeper losses. European markets rose modestly on low volume. US stocks were little changed as concerns about further monetary tightening in China and soft euro-zone economic data made investors cautious.
On Wednesday, Asian stockmarkets fell after Moody's slashed Portugal's credit rating to junk status, reigniting fears that it may need a second rescue package. European markets fell on the Portugese downgrade and China's interest rate rise sparked jitters about global growth prospects. China's central bank increased interest rates for the third time this year today, making clear that taming inflation is a top priority as its economy gently slows. Although Portugal's credit downgrade pressured global stocks and China's rate hike weighed on commodities, Wall Street paid little heed and pushed shares higher.
On Thursday, Asian stockmarkets rose as investors judged that the People's Bank of China is getting closer to taking a break from its multiple increases in policy rates and bank reserve requirements as the economy shows signs of losing steam. European indexes rose after the ECB raised interest by a quarter percent to 1.5 percent as expected by investors and on improved US labour data. US markets rose after data showed an improvement in the labor market ahead of Friday's key U.S. government monthly payrolls report and as retail sales came in stronger than expected, raising hopes that economic recovery was gaining traction. A report by payrolls processor ADP showed U.S. private hiring increased by 157,000 in June, well above the expected 68,000, bouncing back from a surprise slump the month before. A separate report from the Labor Department showed initial claims for state unemployment benefits dropped 14,000 to a seasonally adjusted 418,000 last week. The decline was more than economists's expectations for a fall to 420,000.
On Friday, Asian markets rose following good labour and retail sales data in the US the previous evening. Both European markets and Wall Street fell after the government said businesses added the fewest jobs in more than a year in June and the unemployment rate rose to 9.2 percent and on fears that the eurozone's debt crisis will engulf Italy. The US economy generated a net 18,000 new jobs in June, and the number of jobs added in May was revised down to 25,000, the Labor Department said. Italy's benchmark index, the FTSE Mib, closed 3.5pc down amid worries that political jostling in Rome threatens the country's fiscal stability. The flight from Italian government debt saw the yield, or return, on its 10-year bonds touch 5.3pc, a euro-era high.
This morning, Asian stockmarkets fell on Friday's poor US jobs report and today's emergency ECB meeting over the debt crisis. Australia tumbled the most as it was unveiled on Sunday that the 500 worst polluters are to pay 23 Australian dollars ($25) for every ton of carbon dioxide they emit, with the government promising to compensate households hit with higher power bills under a plan to reduce greenhouse gas emissions.
Last week, global markets rose for a third consecutive week with commodities continuing their appreciation in price. The resolution of the Greek debt crisis and investors perception that China would bring inflation under control by the last quarter of 2011 were the main catalysts for these rises.
However, markets fell on Friday on the low number of jobs created in the US during June and fears that after Greece and Ireland that Italy will be the next country that will have a fiscal crisis.
Investors are worried that Giulio Tremonti, Italy's finance minister, is threatened by corruption accusations against a former aide and seems to have lost the support of his prime minister Silvio Berlusconi. The fear is that if Mr Tremonti is forced out of government it could derail the austerity measures he has pushed through to bring down Italy's huge debt, which amounts to around 120pc of its GDP. That would leave Italy in greater danger of being sucked into the turmoil which overtook Greece and Portugal, as doubts about their finances saw them shut out of the international debt markets.
This week markets will be focusing on this morning's emergency ECB meeting over how to stop contaign spreading to Italy and US second quarter corporate earnings.
Monday, July 4, 2011
By Raymond Chatlani
On Monday, Asian equities slipped and the US Dollar rose, with investors positioning their portfolios ahead of a Greek vote on unpopular fiscal austerity measures this week and a gauge of U.S. factory activity that is expected to show slowing growth. European and US stocks recovered some of last week's losses in early trading after encouraging signs about Europe's debt crisis overshadowed weak data about spending by American consumers. Markets rose as French banks agreed to accept slower repayment of Greece's debt although US consumer spending was unchanged in May, the Commerce Department said which was the worst result since September 2009. And when adjusted for inflation, spending actually dropped 0.1 percent.
On Tuesday, Asian stocks rose and the euro held its gains on Tuesday as investors cheered an agreement by French banks to roll over Greek debt, a move that could lessen the chance of a disorderly default by the nation at the heart of Europe's debt crisis. European and US stockmarkets rose as the Greek budget passed along with enough votes for the austerity measures to be accepted so that Greece will receive the first tranche of further financial aid.
On Wednesday, global markets all rose when Greece passed an austerity plan to avoid a sovereign debt default. Commodities also rallied for a second day, as the dollar fell after Greece cleared a critical hurdle to its debt bailout although protesters are still causing chaos in Athens.
On Thursday, Asian markets all rose for a third day on Greece's austerity measures. European shares rose for a fourth day as Greece edged closer to securing funds needed to avoid default. US stockmarkets rose on data showing that factory activity in the U.S. Midwest accelerated in June.
On Friday, Asian equities edged higher, getting a lift as fears of an imminent default by Greece receded and on encouraging data from the U.S. overnight. The markets appear to have taken weaker-than-expected China data in their stride. China's factory sector grew at its slowest pace in 28 months in June as new orders expanded less quickly, with weaker global demand and tight monetary policy at home pinching production.The official purchasing managers' index (PMI), designed to provide a snapshot of conditions in China's vast manufacturing sector, fell to 50.9 in June, below expectations for a reading of 51.3 and down from 52 in May, the China Federation of Logistics and Purchasing said on Friday. Europeanand US markets rose following a report that manufacturing rebounded in June. The Institute for Supply Management's manufacturing index rose to 55.3 from 53.5 in May.
This morning, Asian stocks climbed and the euro inched higher after policymakers approved an emergency tranche of funding for Greece, offering a lifeline to the debt-stricken nation while strong U.S. data also boosted demand for risky assets. Euro zone finance ministers on Saturday approved a 12 billion euro instalment of Greece's bailout and said details of a second aid package for Athens would be finalised by mid-September.
Last week global markets rose significantly on the back of the Greek government's victory on Wednesday in the critical vote on a new set of austerity packages which marks at the very least a lull in a crisis that has seen investors turn to the safety of government bonds in recent weeks. Investors were calmed after fears of an immediate Greek bankruptcy and had a higher appetite for risk. Commodities also rose except for gold and silver which fell slightly.
There is hope that for final six months of 2011 will be very positive for stockmarkets and commodities. Investors enthusiasm also got a lift on Friday from an unexpected expansion in American manufacturing.
On Monday, Asian equities slipped and the US Dollar rose, with investors positioning their portfolios ahead of a Greek vote on unpopular fiscal austerity measures this week and a gauge of U.S. factory activity that is expected to show slowing growth. European and US stocks recovered some of last week's losses in early trading after encouraging signs about Europe's debt crisis overshadowed weak data about spending by American consumers. Markets rose as French banks agreed to accept slower repayment of Greece's debt although US consumer spending was unchanged in May, the Commerce Department said which was the worst result since September 2009. And when adjusted for inflation, spending actually dropped 0.1 percent.
On Tuesday, Asian stocks rose and the euro held its gains on Tuesday as investors cheered an agreement by French banks to roll over Greek debt, a move that could lessen the chance of a disorderly default by the nation at the heart of Europe's debt crisis. European and US stockmarkets rose as the Greek budget passed along with enough votes for the austerity measures to be accepted so that Greece will receive the first tranche of further financial aid.
On Wednesday, global markets all rose when Greece passed an austerity plan to avoid a sovereign debt default. Commodities also rallied for a second day, as the dollar fell after Greece cleared a critical hurdle to its debt bailout although protesters are still causing chaos in Athens.
On Thursday, Asian markets all rose for a third day on Greece's austerity measures. European shares rose for a fourth day as Greece edged closer to securing funds needed to avoid default. US stockmarkets rose on data showing that factory activity in the U.S. Midwest accelerated in June.
On Friday, Asian equities edged higher, getting a lift as fears of an imminent default by Greece receded and on encouraging data from the U.S. overnight. The markets appear to have taken weaker-than-expected China data in their stride. China's factory sector grew at its slowest pace in 28 months in June as new orders expanded less quickly, with weaker global demand and tight monetary policy at home pinching production.The official purchasing managers' index (PMI), designed to provide a snapshot of conditions in China's vast manufacturing sector, fell to 50.9 in June, below expectations for a reading of 51.3 and down from 52 in May, the China Federation of Logistics and Purchasing said on Friday. Europeanand US markets rose following a report that manufacturing rebounded in June. The Institute for Supply Management's manufacturing index rose to 55.3 from 53.5 in May.
This morning, Asian stocks climbed and the euro inched higher after policymakers approved an emergency tranche of funding for Greece, offering a lifeline to the debt-stricken nation while strong U.S. data also boosted demand for risky assets. Euro zone finance ministers on Saturday approved a 12 billion euro instalment of Greece's bailout and said details of a second aid package for Athens would be finalised by mid-September.
Last week global markets rose significantly on the back of the Greek government's victory on Wednesday in the critical vote on a new set of austerity packages which marks at the very least a lull in a crisis that has seen investors turn to the safety of government bonds in recent weeks. Investors were calmed after fears of an immediate Greek bankruptcy and had a higher appetite for risk. Commodities also rose except for gold and silver which fell slightly.
There is hope that for final six months of 2011 will be very positive for stockmarkets and commodities. Investors enthusiasm also got a lift on Friday from an unexpected expansion in American manufacturing.
Monday, June 27, 2011
Weekly Market Summary
by Raymond Chatlani
This morning, Asian stocks flipped back into the red after Euro zone finance ministers at the weekend postponed a final decision on extending a further $17 billion in emergency loans to Greece, ratcheting up pressure on Athens to first impose harsh austerity measures. Greece will get the next euro12 billion of its existing euro110 billion bailout package in early July, but only if it manages to pass euro28 billion in new spending cuts and economic reforms by the end of the month, said Jean-Claude Juncker, the prime minister of Luxembourg who also chairs the regular meetings of the 17 eurozone finance ministers. European stockmarkets fell as the postponement of a final decision on extending £10.6billion (€12bn) in emergency loans to Greece spooked investors across the world. Wall Street rose as the latest development to reduce Greece's debt helped draw buyers and the S&P 500 touched a key support level, but anemic volume signalled the recent weakness may not be over.
On Tuesday, Asian stockmarkets all rose except for China as Chinese banks faltered on fears of further tightening by the Chinese Central Bank. European indices rose at their fastest pace in two months, bouncing from three-month closing lows on optimism that Greece will get the financial support to avoid defaulting next month. US markets for a fourth day straight on hopes that a vote of confidence in the Greek government will help the country avoid a default.
On Wednesday, Asian stockmarkets jumped after Greece's embattled prime minister won a confidence vote, taking him one step closer to pushing through austerity measures and avoiding a default, although in Shanghai, concerns over a widely expected interest rate hike tempered gains, with the bourse adding just 0.03 percent. European markets were down modestly as Greek Prime Minister George Papandreou attempted to introduce further cuts to the budget in order for the country to receive its latest 12 billion euro bailout. US indices dropped after the Federal Reserve acknowledged the sluggish pace of the U.S. economic recovery without hinting at further plans for stimulus.
On Thursday, Asian stockmarkets fell with investors reluctant to buy riskier assets ahead of a European leaders meeting which could be dominated by talk of Greece's debt crisis, and after the Federal Reserve cut its growth forecasts for this year and next. European shares fell to a fresh three-month closing low, as higher-than-expected weekly U.S. jobless claims intensified doubts about the strength of the recovery in the world's biggest economy. Greece's debt crisis also hurt sentiment. U.S. stocks closed way off session lows on Thursday on news Greece agreed to a five-year austerity plan, but lingering economic uncertainty ultimately drove the S&P 500 lower, keeping a downward trend in place. Greece won the consent of a team of European Union and International Monetary Fund inspectors for its new five-year austerity plan after committing to an additional round of tax increases and spending cuts
On Friday, Asian stockmarkets rocketed higher as Greece's deal with international lenders for a new austerity plan offered investors a rare piece of good news in a week filled with gloomy economic data.
The Greek government survived the confidence vote allowing the markets a brief bounce but a clear resolution has yet to materialise. European indices rose on Greek hopes but gave up all gains at the close as trading was halted in two italian banks.
Italian banks UniCredit and Intesa Sanpaolo fell 5.5 and 4.3 percent respectively, as worries circulated about their capital positions and the deepening euro zone crisis. UniCredit hit a two-year low. Both stocks were suspended for part of the session, due to the sharp movements, but their volumes were still above their respective 30-day averages. US markets fell after a brief suspension in the trading of some big Italian banks raised new concerns about the European debt crisis, though better-than-expected durable goods orders kept losses limited.
This morning, Asian equities slipped and the US Dollar rose, with investors positioning their portfolios ahead of a Greek vote on unpopular fiscal austerity measures this week and a gauge of U.S. factory activity that is expected to show slowing growth.
Last week the US Dollar rose and commodities and global markets fell. Since late April, reports on manufacturing, retail sales, home sales and other economic indicators have come in weaker than economists anticipated. Europe's debt problems and a slowing growth rate in China have also raised concerns about the global economy. With the daily volatility and downbeat sentiment coming from all angles investors are running scared.
To summarise, all these events reported last week are weighing on the markets:-
On Wednesday, Federal Reserve Chairman Ben Bernanke said problems plaguing the U.S. economy may last longer than previously thought. He also warned that the economy is weaker than previously forecast, and lowered this year's gross domestic product growth estimate to 2.9 percent from 3.3 percent.
On Thursday, Greece's new finance minister sought to explain gaps in his austerity plan to EU and IMF officials, with European leaders insisting on deep spending cuts and tax hikes if Athens wants to secure funds and avoid potential default.
The euro tumbled on Thursday, and the dollar's gain, partly on a "flight to safety" was one factor pulling down metals and crude prices.
Meanwhile, in the US the continued rise in first-time claims for unemployment benefits indicated little improvement in the job market since May, when there was a drop in the number of new jobs created. New applications for unemployment benefits rose to 429,000 last week, from 420,000 the week before.
Finally, fears that the Chinese will raise interest rates in the face of a slowing economy and worries about the weak capital positions of Italian banks continues to bother investors.
This week markets will be mainly driven by the following two events.
Athens will vote on Wednesday the framework austerity package on tax increases and spending cuts, and then on its implementation on Thursday. It is critical for the country to pass the package to secure funding from international lenders to avert a sovereign default.
The U.S. Institute for Supply Management is expected to release on Friday data showing a slower rate of growth for factory activity in June after it grew at its slowest pace in May since September 2009.
This morning, Asian stocks flipped back into the red after Euro zone finance ministers at the weekend postponed a final decision on extending a further $17 billion in emergency loans to Greece, ratcheting up pressure on Athens to first impose harsh austerity measures. Greece will get the next euro12 billion of its existing euro110 billion bailout package in early July, but only if it manages to pass euro28 billion in new spending cuts and economic reforms by the end of the month, said Jean-Claude Juncker, the prime minister of Luxembourg who also chairs the regular meetings of the 17 eurozone finance ministers. European stockmarkets fell as the postponement of a final decision on extending £10.6billion (€12bn) in emergency loans to Greece spooked investors across the world. Wall Street rose as the latest development to reduce Greece's debt helped draw buyers and the S&P 500 touched a key support level, but anemic volume signalled the recent weakness may not be over.
On Tuesday, Asian stockmarkets all rose except for China as Chinese banks faltered on fears of further tightening by the Chinese Central Bank. European indices rose at their fastest pace in two months, bouncing from three-month closing lows on optimism that Greece will get the financial support to avoid defaulting next month. US markets for a fourth day straight on hopes that a vote of confidence in the Greek government will help the country avoid a default.
On Wednesday, Asian stockmarkets jumped after Greece's embattled prime minister won a confidence vote, taking him one step closer to pushing through austerity measures and avoiding a default, although in Shanghai, concerns over a widely expected interest rate hike tempered gains, with the bourse adding just 0.03 percent. European markets were down modestly as Greek Prime Minister George Papandreou attempted to introduce further cuts to the budget in order for the country to receive its latest 12 billion euro bailout. US indices dropped after the Federal Reserve acknowledged the sluggish pace of the U.S. economic recovery without hinting at further plans for stimulus.
On Thursday, Asian stockmarkets fell with investors reluctant to buy riskier assets ahead of a European leaders meeting which could be dominated by talk of Greece's debt crisis, and after the Federal Reserve cut its growth forecasts for this year and next. European shares fell to a fresh three-month closing low, as higher-than-expected weekly U.S. jobless claims intensified doubts about the strength of the recovery in the world's biggest economy. Greece's debt crisis also hurt sentiment. U.S. stocks closed way off session lows on Thursday on news Greece agreed to a five-year austerity plan, but lingering economic uncertainty ultimately drove the S&P 500 lower, keeping a downward trend in place. Greece won the consent of a team of European Union and International Monetary Fund inspectors for its new five-year austerity plan after committing to an additional round of tax increases and spending cuts
On Friday, Asian stockmarkets rocketed higher as Greece's deal with international lenders for a new austerity plan offered investors a rare piece of good news in a week filled with gloomy economic data.
The Greek government survived the confidence vote allowing the markets a brief bounce but a clear resolution has yet to materialise. European indices rose on Greek hopes but gave up all gains at the close as trading was halted in two italian banks.
Italian banks UniCredit and Intesa Sanpaolo fell 5.5 and 4.3 percent respectively, as worries circulated about their capital positions and the deepening euro zone crisis. UniCredit hit a two-year low. Both stocks were suspended for part of the session, due to the sharp movements, but their volumes were still above their respective 30-day averages. US markets fell after a brief suspension in the trading of some big Italian banks raised new concerns about the European debt crisis, though better-than-expected durable goods orders kept losses limited.
This morning, Asian equities slipped and the US Dollar rose, with investors positioning their portfolios ahead of a Greek vote on unpopular fiscal austerity measures this week and a gauge of U.S. factory activity that is expected to show slowing growth.
Last week the US Dollar rose and commodities and global markets fell. Since late April, reports on manufacturing, retail sales, home sales and other economic indicators have come in weaker than economists anticipated. Europe's debt problems and a slowing growth rate in China have also raised concerns about the global economy. With the daily volatility and downbeat sentiment coming from all angles investors are running scared.
To summarise, all these events reported last week are weighing on the markets:-
On Wednesday, Federal Reserve Chairman Ben Bernanke said problems plaguing the U.S. economy may last longer than previously thought. He also warned that the economy is weaker than previously forecast, and lowered this year's gross domestic product growth estimate to 2.9 percent from 3.3 percent.
On Thursday, Greece's new finance minister sought to explain gaps in his austerity plan to EU and IMF officials, with European leaders insisting on deep spending cuts and tax hikes if Athens wants to secure funds and avoid potential default.
The euro tumbled on Thursday, and the dollar's gain, partly on a "flight to safety" was one factor pulling down metals and crude prices.
Meanwhile, in the US the continued rise in first-time claims for unemployment benefits indicated little improvement in the job market since May, when there was a drop in the number of new jobs created. New applications for unemployment benefits rose to 429,000 last week, from 420,000 the week before.
Finally, fears that the Chinese will raise interest rates in the face of a slowing economy and worries about the weak capital positions of Italian banks continues to bother investors.
This week markets will be mainly driven by the following two events.
Athens will vote on Wednesday the framework austerity package on tax increases and spending cuts, and then on its implementation on Thursday. It is critical for the country to pass the package to secure funding from international lenders to avert a sovereign default.
The U.S. Institute for Supply Management is expected to release on Friday data showing a slower rate of growth for factory activity in June after it grew at its slowest pace in May since September 2009.
Monday, June 20, 2011
Weekly Market Summary
by Raymond Chatlani
On Monday, Asian stocks weakened on renewed worries over the global economy and concern that protracted wrangling in the euro zone could delay a solution to Greece's debt crisis. European markets rebounded modestly as investors sought out bargains and reacted to takeover and jobs speculation after sharp losses before the weekend. US stockmarkets closed flat on corporate deals and the latest downgrade on Greek debt. The Greek government's efforts to pull its economy out of crisis have been dealt a massive blow as its debt rating has been slashed to CCC now only two notches away from Standard & Poor's (S&P) benchmark default rating.
On Tuesday, Asian stockmarkets all rose as Chinese inflation figures and industrial output provided some relief that the world's second biggest economy would not have to aggressively increase monetary tightening, boosting appetite for risky assets. European and US markets rose, boosted by positive Chinese data. Also US May producer prices rose as anticipated and retail sales showed a milder-than-expected decline.
On Wednesday, Asian stockmarkets initially rose as positive data from the world's two largest economies encouraged investors to buy back into growth-sensitive assets, but closed mixed on concern about the global outlook and the Greek debt crisis after EU ministers failed to seal a deal on Greece, prompting a move away from riskier assets which helped gold extend gains. European indexes fell on renewed concerns over Greece's debt crisis and contagion fears. US markets fell on worries the Greece debt crisis may escalate and after a negative reading on New York State manufacturing underscoring the headwinds facing the economy. The New York Federal Reserve's Empire State manufacturing index, an early indicator of U.S. factory conditions, unexpectedly contracted in June, falling below zero for the first time since November.
On Thursday, Asian stockmarkets got hammered as Greek debt troubles deepened as Euro zone officials said a new three-year financing program for Greece may be delayed until next month due to differences over how to involve private investors and also on fears of a US slowdown on poor economic data. European indices fell sharply as worries about Greek's debt troubles worsened and investors feared contagion, reflected in Spain's debt auction. Us markets rose as fewer Americans applied for unemployment benefits last week, though applications remained above levels consistent with a healthy economy and housing starts and permits for future construction rose in May, signs that offered some hope the economy could soon pull out of its soft patch.
On Friday, Asian stockmarkets fell despite positive economic data out of the U.S., as a political shake-up in Greece added to worries that the country might be forced to default on its debt. European markets slipped with markets still largely unconvinced that Greece can dodge a default without political stability in Athens, keeping equity and commodity prices in a near-term downtrend but reversed and closed in positive territory when investors were reassured by a Franco-German summit on the Greek debt crisis. US indices rose after French President Nicolas Sarkozy hinted at a deal to resolve the Greek debt crisis that has hampered equities and worried investors over a possible credit dry-up.
This morning, Asian stocks flipped back into the red after Euro zone finance ministers at the weekend postponed a final decision on extending a further $17 billion in emergency loans to Greece, ratcheting up pressure on Athens to first impose harsh austerity measures. Greece will get the next euro12 billion of its existing euro110 billion bailout package in early July, but only if it manages to pass euro28 billion in new spending cuts and economic reforms by the end of the month, said Jean-Claude Juncker, the prime minister of Luxembourg who also chairs the regular meetings of the 17 eurozone finance ministers.
World stocks fell for a seventh straight week over concerns over slowdowns in the United States and China and the euro zone debt problems. In the USA, retail sales are down, jobless claims are up, and housing has flatlined. In China, inflation is still higher than the Chinese Central Bank's target of 4 percent per annum and investors fear that interest rates will have to continue to increase although Chinese May 2011 inflation figures and industrial output provided some relief that the world's second biggest economy may not have to aggressively increase monetary tightening. The Greek debt crisis could spread to other EU nations such as Ireland, Portugal, Spain and Italy.
A slew of data showing the United States is on the verge of a slowdown has already done its damage to the market. After the heavy selling of the past several weeks, it seems investors are taking a wait-and-see approach -- for now. On Wednesday, Bernanke is to give his views on the economy and any hint that bond repurchase programme will continue may help markets to rebound
On Monday, Asian stocks weakened on renewed worries over the global economy and concern that protracted wrangling in the euro zone could delay a solution to Greece's debt crisis. European markets rebounded modestly as investors sought out bargains and reacted to takeover and jobs speculation after sharp losses before the weekend. US stockmarkets closed flat on corporate deals and the latest downgrade on Greek debt. The Greek government's efforts to pull its economy out of crisis have been dealt a massive blow as its debt rating has been slashed to CCC now only two notches away from Standard & Poor's (S&P) benchmark default rating.
On Tuesday, Asian stockmarkets all rose as Chinese inflation figures and industrial output provided some relief that the world's second biggest economy would not have to aggressively increase monetary tightening, boosting appetite for risky assets. European and US markets rose, boosted by positive Chinese data. Also US May producer prices rose as anticipated and retail sales showed a milder-than-expected decline.
On Wednesday, Asian stockmarkets initially rose as positive data from the world's two largest economies encouraged investors to buy back into growth-sensitive assets, but closed mixed on concern about the global outlook and the Greek debt crisis after EU ministers failed to seal a deal on Greece, prompting a move away from riskier assets which helped gold extend gains. European indexes fell on renewed concerns over Greece's debt crisis and contagion fears. US markets fell on worries the Greece debt crisis may escalate and after a negative reading on New York State manufacturing underscoring the headwinds facing the economy. The New York Federal Reserve's Empire State manufacturing index, an early indicator of U.S. factory conditions, unexpectedly contracted in June, falling below zero for the first time since November.
On Thursday, Asian stockmarkets got hammered as Greek debt troubles deepened as Euro zone officials said a new three-year financing program for Greece may be delayed until next month due to differences over how to involve private investors and also on fears of a US slowdown on poor economic data. European indices fell sharply as worries about Greek's debt troubles worsened and investors feared contagion, reflected in Spain's debt auction. Us markets rose as fewer Americans applied for unemployment benefits last week, though applications remained above levels consistent with a healthy economy and housing starts and permits for future construction rose in May, signs that offered some hope the economy could soon pull out of its soft patch.
On Friday, Asian stockmarkets fell despite positive economic data out of the U.S., as a political shake-up in Greece added to worries that the country might be forced to default on its debt. European markets slipped with markets still largely unconvinced that Greece can dodge a default without political stability in Athens, keeping equity and commodity prices in a near-term downtrend but reversed and closed in positive territory when investors were reassured by a Franco-German summit on the Greek debt crisis. US indices rose after French President Nicolas Sarkozy hinted at a deal to resolve the Greek debt crisis that has hampered equities and worried investors over a possible credit dry-up.
This morning, Asian stocks flipped back into the red after Euro zone finance ministers at the weekend postponed a final decision on extending a further $17 billion in emergency loans to Greece, ratcheting up pressure on Athens to first impose harsh austerity measures. Greece will get the next euro12 billion of its existing euro110 billion bailout package in early July, but only if it manages to pass euro28 billion in new spending cuts and economic reforms by the end of the month, said Jean-Claude Juncker, the prime minister of Luxembourg who also chairs the regular meetings of the 17 eurozone finance ministers.
World stocks fell for a seventh straight week over concerns over slowdowns in the United States and China and the euro zone debt problems. In the USA, retail sales are down, jobless claims are up, and housing has flatlined. In China, inflation is still higher than the Chinese Central Bank's target of 4 percent per annum and investors fear that interest rates will have to continue to increase although Chinese May 2011 inflation figures and industrial output provided some relief that the world's second biggest economy may not have to aggressively increase monetary tightening. The Greek debt crisis could spread to other EU nations such as Ireland, Portugal, Spain and Italy.
A slew of data showing the United States is on the verge of a slowdown has already done its damage to the market. After the heavy selling of the past several weeks, it seems investors are taking a wait-and-see approach -- for now. On Wednesday, Bernanke is to give his views on the economy and any hint that bond repurchase programme will continue may help markets to rebound
Monday, June 6, 2011
Weekly Market Summary
By Raymond Chatlani
On Monday, Asian markets closed mixed on thin trade as the UK and US markets would be closed. European stockmarkets fell in thin trade with fears of a Greek restructuring weighing on investors.
On Tuesday, Asian stockmarkets rose on news that industrial and manufacturing activity was showing signs of rebounding after a devastating earthquake in Japan in March. European stocks rose as the euro hit a three-week high versus the dollar on a report that Germany could make concessions on efforts to put together a bailout for Greece. The European Union raced to draft a fresh bailout package for indebted Greece to release vital loans next month and avert the risk of the euro zone country defaulting. US markets rallied attributed to news of Germany leading a second bailout for Greece.
On Wednesday, Asian stocks were little changed as traders awaited manufacturing data from China. China’s manufacturing expanded at the slowest pace in nine months in May as the government extended a campaign to cool inflation and the property market. European markets fell on concerns of a slowdown in China's manufacturing growth which was further compounded by poor economic data out of the USA. US stockmarkets extended losses after a survey showed a sharp slowdown in U.S. manufacturing activity in May, adding to fears the economic recovery was faltering.
On Thursday, Asian stockmarkets fell heavily on poor US economic data on fears of slowing US growth. European markets fell on poor US economic data and worries about Greece. US stocks closed flat as as investors absorbed the latest economic data ahead of Friday's May jobs report.
On Friday, Asian stocks closed mixed before a key U.S. jobs report later in the day. European stockmarkets registered moderate gains while Greek stocks soared on positive comments from the Finance Ministry. US markets fell as employers hired only 54,000 new workers in May, the fewest in eight months, and the unemployment rate rose to 9.1 percent.
Last week Wall Street closed out a fifth week of losses with more selling on Friday after an anemic jobs report strengthened the case that the economy was slowing, though analysts said indexes may stabilize in the near-term. Earlier last week, we saw reports that US and Chinese manufacturing slowed in May. There is evidence that the U.S. economy is slowing, hampered by high gas prices and natural disasters in Japan that have hurt U.S. manufacturers. Also, the Chinese margin hikes in the banking system seems to be finally moderating economic growth which may bring down inflation in the second half of the year.
It looks like the the Chinese interest rate increases and increase of margins for their banking sector is working. In the US, economic growth is slowing and we shall probably see another stimulus package. With both unemployment and housing deteriorating in the USA, the economy cannot move forward unless the Feds continue to stimulate the economy.
On Monday, Asian markets closed mixed on thin trade as the UK and US markets would be closed. European stockmarkets fell in thin trade with fears of a Greek restructuring weighing on investors.
On Tuesday, Asian stockmarkets rose on news that industrial and manufacturing activity was showing signs of rebounding after a devastating earthquake in Japan in March. European stocks rose as the euro hit a three-week high versus the dollar on a report that Germany could make concessions on efforts to put together a bailout for Greece. The European Union raced to draft a fresh bailout package for indebted Greece to release vital loans next month and avert the risk of the euro zone country defaulting. US markets rallied attributed to news of Germany leading a second bailout for Greece.
On Wednesday, Asian stocks were little changed as traders awaited manufacturing data from China. China’s manufacturing expanded at the slowest pace in nine months in May as the government extended a campaign to cool inflation and the property market. European markets fell on concerns of a slowdown in China's manufacturing growth which was further compounded by poor economic data out of the USA. US stockmarkets extended losses after a survey showed a sharp slowdown in U.S. manufacturing activity in May, adding to fears the economic recovery was faltering.
On Thursday, Asian stockmarkets fell heavily on poor US economic data on fears of slowing US growth. European markets fell on poor US economic data and worries about Greece. US stocks closed flat as as investors absorbed the latest economic data ahead of Friday's May jobs report.
On Friday, Asian stocks closed mixed before a key U.S. jobs report later in the day. European stockmarkets registered moderate gains while Greek stocks soared on positive comments from the Finance Ministry. US markets fell as employers hired only 54,000 new workers in May, the fewest in eight months, and the unemployment rate rose to 9.1 percent.
Last week Wall Street closed out a fifth week of losses with more selling on Friday after an anemic jobs report strengthened the case that the economy was slowing, though analysts said indexes may stabilize in the near-term. Earlier last week, we saw reports that US and Chinese manufacturing slowed in May. There is evidence that the U.S. economy is slowing, hampered by high gas prices and natural disasters in Japan that have hurt U.S. manufacturers. Also, the Chinese margin hikes in the banking system seems to be finally moderating economic growth which may bring down inflation in the second half of the year.
It looks like the the Chinese interest rate increases and increase of margins for their banking sector is working. In the US, economic growth is slowing and we shall probably see another stimulus package. With both unemployment and housing deteriorating in the USA, the economy cannot move forward unless the Feds continue to stimulate the economy.
Monday, May 30, 2011
Weekly Market Summary
by Raymond Chatlani
On Monday, Asian stockmarkets were sharply lower amid signs of U.S. economic sluggishness and escalating worries about Europe's debt crisis after Italy and Greece were slapped with credit downgrades. In Europe, Standard & Poors cut its ratings outlook for Italy's debt from stable to negative Saturday, citing the country's poor growth prospects and concerns about the government's ability to reduce public borrowing. But with its rating still A+, Italy remains in far better shape than Greece. European mining and airline shares fell on renewed worries over the Eurozone debt crisis and as an eruption by Iceland's most active volcano was set to keep the island's main airport shut on Monday, while other European nations watched for any disruption to their air routes from a towering plume of smoke and ash. US markets joined the global sell-off on european debt worries.
On Tuesday, Asian stockmarkets closed mixed and flat amid eurozone worries. European markets rose on strong German business sentiment which was above expectations. US stocks ended the day with modest losses with weakness on tech stocks while oil stocks gained.
On Wednesday, Asian stockmarkets fell with Asian investors spooked by concerns over valuations and the outlook for commodities. European markets fell at the start of trading but closed the day higher on a turnaround in Wall Street. US indexes rose as commodities gained.
On Thursday, Asian stocks rose led by commodity and consumer related sectors, with steadier commodity markets and the euro's rally above $1.41 bringing some investors back into the markets in search of bargains. The risks surrounding the euro have not eased much, with Greece fighting to avoid a debt restructuring that could have a big ripple effect across other high risk-European countries struggling with gaping fiscal deficits. European stockmarkets fell as a result of disappointing economic news from the US and the ongoing troubles in Greece. US markets rose on upbeat corporate earnings although two disappointing economic reports revealed a weak U.S. jobs market and sluggish overall economic growth. US GDP grew at a sluggish 1.8 percent in the January-March quarter and more people applied for unemployment benefits last week. The number of people seeking benefits rose by 10,000 to 424,000, more than analysts were expecting.
On Friday, Asian stockmarkets rose for a second day after leaders of the Group of Eight said the global economy is gaining strength and South Korea’s current-account surplus widened. European markets rose across the board, with banks leading the advance after Citigroup turned bullish on the sector. Wall street rose as bullish comments about Greece caused the dollar to fall against the Euro, resulting in strength in commodity prices.
Last week, global equities and commodities recovered slightly, though Europe fell after Italy and Greece were slapped with credit downgrades. The U.S. dollar fell broadly on Friday after weaker-than-expected U.S. consumer spending and housing data stoked worries the recovery is losing momentum, while commodities posted a third straight week of gains. Friday's data showed high gasoline prices crimped U.S. consumer spending and bad weather pushed pending home sales to a seven-month low in April.
Today, trading is expected to be thin due to holidays in the U.S. and the UK. Although markets had a positive week, signs of a less than robust recovery in the US economy together with worries that Greece may not be able to avoid a default may hold this market within a range throughout the summer
On Monday, Asian stockmarkets were sharply lower amid signs of U.S. economic sluggishness and escalating worries about Europe's debt crisis after Italy and Greece were slapped with credit downgrades. In Europe, Standard & Poors cut its ratings outlook for Italy's debt from stable to negative Saturday, citing the country's poor growth prospects and concerns about the government's ability to reduce public borrowing. But with its rating still A+, Italy remains in far better shape than Greece. European mining and airline shares fell on renewed worries over the Eurozone debt crisis and as an eruption by Iceland's most active volcano was set to keep the island's main airport shut on Monday, while other European nations watched for any disruption to their air routes from a towering plume of smoke and ash. US markets joined the global sell-off on european debt worries.
On Tuesday, Asian stockmarkets closed mixed and flat amid eurozone worries. European markets rose on strong German business sentiment which was above expectations. US stocks ended the day with modest losses with weakness on tech stocks while oil stocks gained.
On Wednesday, Asian stockmarkets fell with Asian investors spooked by concerns over valuations and the outlook for commodities. European markets fell at the start of trading but closed the day higher on a turnaround in Wall Street. US indexes rose as commodities gained.
On Thursday, Asian stocks rose led by commodity and consumer related sectors, with steadier commodity markets and the euro's rally above $1.41 bringing some investors back into the markets in search of bargains. The risks surrounding the euro have not eased much, with Greece fighting to avoid a debt restructuring that could have a big ripple effect across other high risk-European countries struggling with gaping fiscal deficits. European stockmarkets fell as a result of disappointing economic news from the US and the ongoing troubles in Greece. US markets rose on upbeat corporate earnings although two disappointing economic reports revealed a weak U.S. jobs market and sluggish overall economic growth. US GDP grew at a sluggish 1.8 percent in the January-March quarter and more people applied for unemployment benefits last week. The number of people seeking benefits rose by 10,000 to 424,000, more than analysts were expecting.
On Friday, Asian stockmarkets rose for a second day after leaders of the Group of Eight said the global economy is gaining strength and South Korea’s current-account surplus widened. European markets rose across the board, with banks leading the advance after Citigroup turned bullish on the sector. Wall street rose as bullish comments about Greece caused the dollar to fall against the Euro, resulting in strength in commodity prices.
Last week, global equities and commodities recovered slightly, though Europe fell after Italy and Greece were slapped with credit downgrades. The U.S. dollar fell broadly on Friday after weaker-than-expected U.S. consumer spending and housing data stoked worries the recovery is losing momentum, while commodities posted a third straight week of gains. Friday's data showed high gasoline prices crimped U.S. consumer spending and bad weather pushed pending home sales to a seven-month low in April.
Today, trading is expected to be thin due to holidays in the U.S. and the UK. Although markets had a positive week, signs of a less than robust recovery in the US economy together with worries that Greece may not be able to avoid a default may hold this market within a range throughout the summer
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