by Raymond Chatlani
On Monday, Asian markets rose as Japan's nuclear crisis eased as two of the six reactor units were safely cooled down, though pressure unexpectedly rose in a third unit's reactor, meaning plant operators may need to deliberately release radioactive steam. The Japanese market was closed for a public holiday. European and US stockmarkets gained after investor confidence rose on signs the situation at Japan's nuclear plant was improving, with telecoms lifted by Deutsche Telekom's sale of T-Mobile USA to AT&T.
On Tuesday, Asian shares posted modest gains, after bouncing on Monday when Tokyo markets were closed for a holiday. Support came from U.S. stocks, which were buoyed on Monday by AT&T's move to buy Deutsche Telecom. Japanese stocks jumped nearly 4 percent amid reports of progress in stabilising an earthquake-damaged nuclear plant. European markets slipped as investors worried about the outlook for higher interest rates in the euro zone and as tensions in the Middle East intensified. US stockmarkets closed modestly lower on low volume.
On Wednesday, Asian markets fell with Tokyo's Nikkei shedding nearly 2 percent, and oil ticked up as investors fretted about the possible repercussions of a nuclear crisis in Japan, violence in Libya and unrest in the Middle East. European stockmarkets fell after draft conclusions prepared for the euro zone summit showed member states will only take a decision on how to increase the effective capacity of their bailout fund by the end of June and not at this week's summit but finished in positive territory on strong miners. US Indices rose on strong buying interest, although new-home sales fell 16.9 percent last month to a seasonally adjusted annual rate of 250,000 homes to the fewest on records dating back nearly half a century.
On Thursday, Asian stockmarkets eked out small gains as higher commodities prices lifted materials shares. European markets rose although Portugese Prime Minister Jose Socrates resigned yesterday following parliament's rejection of his austerity plans which was seen as increasing the likelihood that Portugal will join Greece and Ireland in requiring a bailout from the European Union. US shares rose as data showed the improvement in the labor market was becoming sustained, with new claims for jobless benefits falling last week and the four-week moving average dropping to it lowest level in more than 2-1/2 years. Gold temporarily hit a new price of $1,447 an ounce with silver hitting a new 31 year high crossing $38 an ounce before both retreated but held near their highs.
Asian stocks rose on Friday amid optimism about upcoming company earnings, and the euro held steady as investors bet European leaders would be able to prevent a political crisis in Portugal worsening the region's sovereign debt crisis. European stockmarkets rose slightly with all major benchmark indices struggling to find direction, as bail-out concerns in Portugal continued to worry nervous investors. American markets rose as technology shares led Wall Street higher after Oracle's upbeat outlook.
A good week for equities and commodities notwithstanding the same tensions still present in Japan, the Middle East especially Libya and Portugal's potential debt problems. The markets have already discounted this news and could continue to go higher especially next month if company earnings continue to exceed expectations.
Tuesday, March 29, 2011
Monday, March 21, 2011
Weekly Market Summary
by Raymond Chatlani
On Monday, Asian developed stockmarkets fell while emerging markets rose and oil nursed losses after a massive earthquake in Japan sent investors scurrying to safe haven assets and raised concerns of falling demand for commodities. The Japanese quake hit European shares with insurers getting hammered. Us stockmarkets fell following world global markets.
On Tuesday, Japanese shares tumbled for a second day as the nuclear crisis created panic as dangerous levels of radiation leaking from a crippled nuclear plant forced Japan to order 140,000 people to seal themselves indoors after an explosion and a fire dramatically escalated the 4-day-old crisis spawned by a deadly tsunami. The Nikkei fell 17% over two days only. Other Asian markets dived also. European and US markets followed Japan's plunge.
Asian financial markets rallied on Wednesday, led by a nearly 6 percent surge in Japanese stocks, after a horrendous two-day sell-off on last week's killer earthquake and an unfolding nuclear crisis.
Other Asian stock markets also closed higher. European and US fell sharply following disappointing U.S. economic news and more worries about the nuclear crisis in Japan. The Commerce Department reported that new home construction fell to the second-lowest level on record in February, reflecting weak demand. Wholesale prices, meanwhile, rose last month by the most in nearly two years due to higher energy and food costs.
On Thursday, Asian stockmarkets fell after U.S. officials said the risk of a catastrophic radiation leak from an earthquake-crippled Japanese nuclear plant was rising. European and US markets rose as US factory output rose for the sixth straight month and US initial claims for state unemployment benefits fell 16,000 to a seasonally adjusted 385,000. The four-week moving average of unemployment claims -- a better measure of underlying trends - dropped 7,000 to 386,250, the lowest since mid-July 2008 and staying below the 400,000 level for a third straight week.
On Friday, Asian stockmarkets rose as the Yen tumbled after the Group of Seven agreed on rare joint intervention to curb the soaring currency and calm markets jittery over Japan's nuclear power plant crisis. European shares, led by industrials rose after the Group of Seven nations helped calm market nerves over the Japanese earthquake-tsunami disaster by intervening to restrain a soaring yen. US markets rose sharply as Wall Street welcomed reports of a cease-fire in Libya which reduced tensions in the region and a coordinated effort by industrialized nations to bring the Japanese yen down from historic highs.
Over the weekend, a coalition force backed by a United Nations mandate imposed a no fly zone over Libya and attacked Gadhafi's air defences. US, British and French military warplanes, warships and submarines fired cruise missiles to destroy Gadhafi's airplanes and communications equipment. The U.S. military said the bombardment so far — a rain of Tomahawk cruise missiles and precision bombs from American and European aircraft, including long-range stealth B-2 bombers — had succeeded in heavily degrading Gadhafi's air defenses. As of Sunday, members of the coalition included the U.S., Great Britain, France, Canada, Italy, Belgium and Qatar.
In Japan, while the operator of the overheated nuclear plant said two of the six reactor units were safely cooled down, pressure unexpectedly rose in a third unit's reactor, meaning plant operators may need to deliberately release radioactive steam.
Last week, markets got hammered with Japan falling 10% and other global markets falling around 3%. This will probably be temporary as economic data out of the US continues to improve.
In America, factories are producing more cars, computers and household appliances, and applications for unemployment benefits over the past four weeks are at the lowest point since summer 2008. Economic data released last Thursday suggest that March will be the second straight month of strong job growth. Still, rising prices for household necessities and trouble overseas could slow the U.S. economy in the coming months.
Also, manufacturing output has grown in all but four months since the recession ended in June 2009. And manufacturers have created 190,000 jobs over the past year, the highest 12-month total for that group since 1998. Last month alone factories added 33,000 net new jobs. Rising factory output supports more high-paying jobs.
Private companies added 222,000 jobs in February, the most in almost a year, and unemployment fell to 8.9 percent. The unemployment rate has fallen by nearly a full percentage point since December -- the steepest three-month decline since 1983.
Most economists don't expect the Federal reserve to take any steps to combat inflation, such as raising short-term interest rates, until next year. Overall, the Fed this week offered its most optimistic assessment of the economy since the recession ended, largely because of stronger job growth.
Though investors are entering next week’s markets after five volatile days of trading and they could encounter another bruising ride driven by fast-moving events in Japan, Libya and parts of the Middle East, we remain cautiously optimistic that this turmoil will prove to be temporary.
On Monday, Asian developed stockmarkets fell while emerging markets rose and oil nursed losses after a massive earthquake in Japan sent investors scurrying to safe haven assets and raised concerns of falling demand for commodities. The Japanese quake hit European shares with insurers getting hammered. Us stockmarkets fell following world global markets.
On Tuesday, Japanese shares tumbled for a second day as the nuclear crisis created panic as dangerous levels of radiation leaking from a crippled nuclear plant forced Japan to order 140,000 people to seal themselves indoors after an explosion and a fire dramatically escalated the 4-day-old crisis spawned by a deadly tsunami. The Nikkei fell 17% over two days only. Other Asian markets dived also. European and US markets followed Japan's plunge.
Asian financial markets rallied on Wednesday, led by a nearly 6 percent surge in Japanese stocks, after a horrendous two-day sell-off on last week's killer earthquake and an unfolding nuclear crisis.
Other Asian stock markets also closed higher. European and US fell sharply following disappointing U.S. economic news and more worries about the nuclear crisis in Japan. The Commerce Department reported that new home construction fell to the second-lowest level on record in February, reflecting weak demand. Wholesale prices, meanwhile, rose last month by the most in nearly two years due to higher energy and food costs.
On Thursday, Asian stockmarkets fell after U.S. officials said the risk of a catastrophic radiation leak from an earthquake-crippled Japanese nuclear plant was rising. European and US markets rose as US factory output rose for the sixth straight month and US initial claims for state unemployment benefits fell 16,000 to a seasonally adjusted 385,000. The four-week moving average of unemployment claims -- a better measure of underlying trends - dropped 7,000 to 386,250, the lowest since mid-July 2008 and staying below the 400,000 level for a third straight week.
On Friday, Asian stockmarkets rose as the Yen tumbled after the Group of Seven agreed on rare joint intervention to curb the soaring currency and calm markets jittery over Japan's nuclear power plant crisis. European shares, led by industrials rose after the Group of Seven nations helped calm market nerves over the Japanese earthquake-tsunami disaster by intervening to restrain a soaring yen. US markets rose sharply as Wall Street welcomed reports of a cease-fire in Libya which reduced tensions in the region and a coordinated effort by industrialized nations to bring the Japanese yen down from historic highs.
Over the weekend, a coalition force backed by a United Nations mandate imposed a no fly zone over Libya and attacked Gadhafi's air defences. US, British and French military warplanes, warships and submarines fired cruise missiles to destroy Gadhafi's airplanes and communications equipment. The U.S. military said the bombardment so far — a rain of Tomahawk cruise missiles and precision bombs from American and European aircraft, including long-range stealth B-2 bombers — had succeeded in heavily degrading Gadhafi's air defenses. As of Sunday, members of the coalition included the U.S., Great Britain, France, Canada, Italy, Belgium and Qatar.
In Japan, while the operator of the overheated nuclear plant said two of the six reactor units were safely cooled down, pressure unexpectedly rose in a third unit's reactor, meaning plant operators may need to deliberately release radioactive steam.
Last week, markets got hammered with Japan falling 10% and other global markets falling around 3%. This will probably be temporary as economic data out of the US continues to improve.
In America, factories are producing more cars, computers and household appliances, and applications for unemployment benefits over the past four weeks are at the lowest point since summer 2008. Economic data released last Thursday suggest that March will be the second straight month of strong job growth. Still, rising prices for household necessities and trouble overseas could slow the U.S. economy in the coming months.
Also, manufacturing output has grown in all but four months since the recession ended in June 2009. And manufacturers have created 190,000 jobs over the past year, the highest 12-month total for that group since 1998. Last month alone factories added 33,000 net new jobs. Rising factory output supports more high-paying jobs.
Private companies added 222,000 jobs in February, the most in almost a year, and unemployment fell to 8.9 percent. The unemployment rate has fallen by nearly a full percentage point since December -- the steepest three-month decline since 1983.
Most economists don't expect the Federal reserve to take any steps to combat inflation, such as raising short-term interest rates, until next year. Overall, the Fed this week offered its most optimistic assessment of the economy since the recession ended, largely because of stronger job growth.
Though investors are entering next week’s markets after five volatile days of trading and they could encounter another bruising ride driven by fast-moving events in Japan, Libya and parts of the Middle East, we remain cautiously optimistic that this turmoil will prove to be temporary.
Monday, March 14, 2011
Weekly Summary
On Monday, Asian stocks slipped as concerns about the Middle East and higher energy prices weighed on equities. As a consequence, Gold hit a new all time high of $1,438 an ounce and silver hit a new 31 year high of $36.40 an ounce. Moody's slashed Greece's credit rating by three notches to B1 from Ba1 with a negative outlook, citing significant risks to the country's fiscal consolidation plan and risks of a debt restructuring. European equities fell on strong oil prices on mounting unrest in the Arab world. US stockmarkets fell as US Crude oil hit a two year high of $107 a barrel on Libyan instensified fighting.
On Tuesday, Asian stockmarkets rose although gains were capped by Middle East tensions. Most commodities retreated on a report that Gadhafi would give up power if he was offered safe passage. European and US markets rose as financial shares pushed stock indexes higher on signs that banks may soon raise their dividends.
On Wednesday, Asian stockmarkets rose as oil prices fell for a second day although investors remained on edge because of the turmoil in the Middle East. European and US markets fell as the fighting in Libya and worries that turmoil could erupt in other Arab countries continued to cast a shadow. Investors were also worried about the euro zone's sovereign debt problem after Portugal saw its cost for issuing two-year debt soar to its highest level since it joined the euro in 1999, rekindling fears Lisbon will need a bailout.
On Thursday, Asian shares edged lower, weighed down by worries that a surge in oil prices could exacerbate inflation pressures in the region and cripple economic growth and after surprisingly weak Chinese trade data hit markets. Latest data showed China swung to a surprise trade deficit in February of $7.3 billion (4.5 billion pounds), its largest in seven years, as the Lunar New Year holiday dealt a sharper blow to export activity than had been expected. European stockmarkets fell as Moody's cut Spain's sovereign debt rating one notch, warning of potential further cuts because it fears bank restructuring will likely cost more than twice what the government expects. US markets fell as investors absorbed a larger-than-expected increase in initial jobless claims, a surprise trade deficit in China and a downgrade to Spain's credit rating.
On Friday, Asian stockmarkets fell about 1 percent, extending their drop by more than 3 percent for the week as fresh outbreaks of violence in the Middle East kept markets on edge and on a major earthquake of magnitude 8.9 in Japan. European shares fell in sympathy with global markets. US stockmarkets rose on bargain hunting.
This morning, Asian developed stockmarkets fell while emerging markets rose and oil nursed losses after a massive earthquake in Japan sent investors scurrying to safe haven assets and raised concerns of falling demand for commodities.
With the civil war in Libya, the slashing of Greece's and Spain's credit ratings and the huge earthquake and tsunami in Japan, it is surprising that markets did not go down significantly last week. This is probably because we are seeing the US pulling out of recession.
This week we should see further weakness as there was a second nuclear explosion this morning in Japan and it is estimated that the damage caused by both the earthquake and tsunami will cost tens of billions in dollars to restore the infrastructure. This weakness may continue for a few weeks until next month where companies report earnings for the first quarter of this year.
Monday, March 7, 2011
Weekly Market Summary
by Raymond Chatlani
On Monday, Asian markets edged higher although the worsening situation in Libya stirred renewed concern about disruptions to oil production. European and US stockmarkets rose after oil prices stabilized and corporations announced another round of deals.
On Tuesday, Asian stocks rose, tracking U.S. shares which gained on optimistic remarks from influential investor Warren Buffett, while Chinese manufacturing growth slowed to a six-month low. Slowing economic growth in China is considered good for cooling inflation. European stockmarkets rose as manufacturing growth accelerated in the Eurozone to the fastest pace in more than ten years but fell into negative territory in the afternoon on Middle East tensions. US markets fell on fears of a prolonged civil war in Libya and as gold and oil both appreciated.
On Wednesday, Asian stockmarkets fell as oil prices rose above $116 a barrel on fears that anti-government protests in the Middle East could spread as tensions grow in Libya. European shares fell on mounting worries political unrest in the Middle East could result in persistently high energy prices and derail economic recovery. US markets rose as the private sector added 217,000 jobs in February beating analyst's expectations who had expected a rise of 175,000 jobs only.
On Thursday, Asian stock markets rose on upbeat US economic news and bargain hunting, but optimism was tempered by turmoil in the Middle East and North Africa, which kept oil around two-year highs. European markets rebounded on US data and a fall in the price of oil. US shares rocketed as unemployment benefits requests fell to a 3 year low.
On Friday, Asian shares surged, helped by retreating oil prices and a firmer Wall Street close while the euro perked up after the central bank signalled a rate rise as early as next month. European and US stockmarkets fell as worries about another jump in oil prices overshadowed a solid report on the U.S. job market. The Labor Department reported that employers added 192,000 jobs in February, in the range of what economists expected.
The good news last week was that the US unemployment rate dipped to 8.9 percent from 9 percent the previous month. The rate has dropped for three months in a row and is now at its lowest level since April 2009. Over the past few months, economic data has shown that the US is coming out of recession and this should continue to drive stockmarkets higher. Also, taking into consideration the civil war in Libya and the escalating price of oil, emerging markets have been quite resilient and have not fallen a lot.
On the other hand, the civil war in Libya and fears that tensions will spread throughout the rest of the Middle East could derail this recovery, especially if the price of crude oil reaches unsustainable heights. As a rresult, this morning US Crude Oil rose above $106 to the highest in 30 months as escalating violence in Libya renewed concern that supply disruptions may spread through the Middle East. As a consequence, Gold hit $1,438 an ounce and silver hit a new 31 year high of $36.40 an ounce.
On Monday, Asian markets edged higher although the worsening situation in Libya stirred renewed concern about disruptions to oil production. European and US stockmarkets rose after oil prices stabilized and corporations announced another round of deals.
On Tuesday, Asian stocks rose, tracking U.S. shares which gained on optimistic remarks from influential investor Warren Buffett, while Chinese manufacturing growth slowed to a six-month low. Slowing economic growth in China is considered good for cooling inflation. European stockmarkets rose as manufacturing growth accelerated in the Eurozone to the fastest pace in more than ten years but fell into negative territory in the afternoon on Middle East tensions. US markets fell on fears of a prolonged civil war in Libya and as gold and oil both appreciated.
On Wednesday, Asian stockmarkets fell as oil prices rose above $116 a barrel on fears that anti-government protests in the Middle East could spread as tensions grow in Libya. European shares fell on mounting worries political unrest in the Middle East could result in persistently high energy prices and derail economic recovery. US markets rose as the private sector added 217,000 jobs in February beating analyst's expectations who had expected a rise of 175,000 jobs only.
On Thursday, Asian stock markets rose on upbeat US economic news and bargain hunting, but optimism was tempered by turmoil in the Middle East and North Africa, which kept oil around two-year highs. European markets rebounded on US data and a fall in the price of oil. US shares rocketed as unemployment benefits requests fell to a 3 year low.
On Friday, Asian shares surged, helped by retreating oil prices and a firmer Wall Street close while the euro perked up after the central bank signalled a rate rise as early as next month. European and US stockmarkets fell as worries about another jump in oil prices overshadowed a solid report on the U.S. job market. The Labor Department reported that employers added 192,000 jobs in February, in the range of what economists expected.
The good news last week was that the US unemployment rate dipped to 8.9 percent from 9 percent the previous month. The rate has dropped for three months in a row and is now at its lowest level since April 2009. Over the past few months, economic data has shown that the US is coming out of recession and this should continue to drive stockmarkets higher. Also, taking into consideration the civil war in Libya and the escalating price of oil, emerging markets have been quite resilient and have not fallen a lot.
On the other hand, the civil war in Libya and fears that tensions will spread throughout the rest of the Middle East could derail this recovery, especially if the price of crude oil reaches unsustainable heights. As a rresult, this morning US Crude Oil rose above $106 to the highest in 30 months as escalating violence in Libya renewed concern that supply disruptions may spread through the Middle East. As a consequence, Gold hit $1,438 an ounce and silver hit a new 31 year high of $36.40 an ounce.
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