by Raymond Chatlani
On Monday, Asian stocks mostly fell as China on Sunday raised banks' reserve requirements for the fourth time this year while the euro weakened on a broad wave of profit-taking. The move was not a surprise as market players had predicted more tightening after last week's data showed an acceleration in inflation. European stockmarkets fell on talk about Greek restructuring of its debt, including a Greek newspaper report on Monday that the government had asked the International Monetary Fund and European Union to start discussions on a restructuring. A Greek finance ministry source said the report was not true. On bond markets, Portuguese, Spanish and other lower-rated euro zone government debt came under pressure. Moody's cut the long-term bank deposit ratings of Ireland's government-guaranteed banks by two notches to Baa1 following a sovereign downgrade last week, meaning that all the lenders are now classified as junk. European and US markets plummeted after S & P downgraded its credit outlook to negative for the United States, citing a "material risk" that policymakers may not reach agreement on a plan to trim its large budget deficit and mounting concerns over Greece. Gold temporarily hit a new high of $1,497 an ounce before retreating to $1,490 an ounce.
On Tuesday, Asian markets fell after rating agency Standard & Poor's lowered its U.S. credit outlook to negative, prompting a global flight to other assets. European stockmarkets rebounded on bargain hunting after a slump triggered by Standard & Poor's first ever downgrade of its US sovereign debt outlook. U.S. stocks rose as results from Johnson & Johnson and Goldman Sachs Group Inc. helped lift sentiment after the prior day’s rout and as new home construction rose 7.2 percent from February to 549,000 units.
Asian stocks rose on Wednesday, following a rebound on Wall Street and in Europe on upbeat corporate results, and commodity-linked currencies such as the Australian dollar also gained as momentum returned to metals markets. Gold pierced record highs above $1,500 an ounce and silver notched the biggest rise of the young second quarter exceeding $45 an ounce as investors banked on safe-haven bets on worries over inflation and the economy. European and US markets rose sharply on on strong earnings reports by Intel Corp. and other companies.
On Thursday, Asian stockmarkets rose as the U.S. dollar slid to a 2-1/2-year low against a basket of major currencies and as investors scrambled to get in front of upward momentum in higher-yielding assets, particularly in emerging markets. European and US markets were buoyed by upbeat US earnings as Intel Corp beat expectations, Apple's iphone sales helped earnings almost double and General Electric posted an 80 percent surge in first quarter earnings.
Markets were closed for Good Friday.
Last week, global markets rose on good corporate first quarter earnings ignoring worries on Greek, Irish and Portugese debt problems and the problems in the Middle East including the escalating violence in Libya.
The US dollar tanked and commodity prices rose with gold hitting new all time highs and silver hitting new 32 year highs. It seems that investors are selling the US dollar and bonds and are buying stocks and hard assets as replacements to protect themselves from high inflation. While it is hard to predict the short term, we should continue to see this strategy over the medium term as long as the US deficits remain and interest rates continue to be lower than the rate of inflation.
Tuesday, April 26, 2011
Monday, April 18, 2011
Weekly Market Summary
by Raymond Chatlani
On Monday, Asian stockmarkets fell as Japan's core machinery orders fell 2.3 percent from a month earlier in February, with the bigger-than-expected fall during pre-quake conditions raising concerns about the severity of the March 11 quake's impact in the months to come, as investors continued to worry about soaring oil prices although investors ignored news that China said it had posted its first quarterly trade deficit in seven years, despite a narrow surplus in March, as rising commodity prices pushed manufacturers' costs higher. European and US markets mostly fell on investor concerns over the impact higher raw material costs as well the effects of Japan's earthquake on the earnings season. Adding to the worries in the United States was news after the bell that Alcoa Inc revenue missed forecasts, sending its shares down 3.6 percent in post-market trade.
On Tuesday, Asian markets fell after Japan raised the severity of its nuclear crisis, putting it on par with the 1986 Chernobyl disaster. Japan's Nikkei tumbled 2.1 percent on worries about the impact of the March 11 earthquake and tsunami on company results. European and US stockmarkets fell on worries about Japan and first quarter earnings. Commodities ended sharply lower on Tuesday, posting their steepest daily fall in a month after more bearish comments on oil from Goldman Sachs triggered a second day of widespread selling. Oil closed down $3 a barrel in both London and New York after Goldman, a long-time commodities bull, said prices had gotten ahead of fundamentals. Warnings from the International Energy Agency (IEA) and OPEC that high prices would erode global demand also weighed on the market.
On Wednesday, Asian stockmarkets rose with investors looking for fresh opportunities to bet on risky assets after a sharp drop in oil the previous day caused an unwinding of positions. European bourses recovered from Tuesday's sell off on spectular results from JP Morgan. US markets ended a choppy session little changed.
On Thursday, Asian markets fell amid concerns that rising food and fuel costs could undermine consumer demand, hurting economic growth and company profits, although Singapore's gross domestic product grew 23.5 percent quarter-on-quarter on an seasonally-adjusted annualised basis, blowing past even the most bullish forecast in a Reuters poll. European stockmarkets fell as traders reacted to a raft of company news and the lingering eurozone debt crisis. US indices were flat as jobless claims rose by 27,000 to 412,000 in the week to 9 April, a bigger rise than had been expected. Producer prices also rose more than expected. They were up by 0.3% in March, the biggest year-on year increase since August 2009.
On Friday, Asian stockmarkets fell as concern over Chinese inflation rattled the markets. China's economy grew a more-than-estimated 9.7 percent in the first quarter and inflation accelerated in March to the fastest pace since 2008. China’s consumer prices rose 5.4 percent from a year earlier, the statistics bureau said at a briefing in Beijing today. The median forecasts in Bloomberg News surveys of economists were for growth of 9.4 percent and inflation of 5.2 percent. Industrial output increased 14.8 percent year-on-year, exceeding estimates of 14 percent. Gold briefly jumped to another record high of $1,479 an ounce after the dollar fell to its lowest since late 2009 against a basket of major currencies, taking silver to a 31-year high of over $42 an ounce, while inflation pressures in China also helped lift bullion's appeal.
China’s consumer prices rose 5.4 percent from a year earlier, the statistics bureau said at a briefing in Beijing today. The median forecasts in Bloomberg News surveys of economists were for growth of 9.4 percent and inflation of 5.2 percent. Industrial output increased 14.8 percent year-on-year, exceeding estimates of 14 percent. European markets and the Dow and S&P rose as encouraging economic indicators offset some disappointing corporate results, though weakness in Google pressured the Nasdaq. A government report showed underlying inflation pressures remained contained in March, while a survey showed April consumer sentiment rose more than expected.
Last week, equity markets mostly fell with commodity prices flat. The only exceptions were gold and silver which hit new highs as inflation concerns stoked demand. In fact, this morning Gold hit a new high of $1,485 an ounce with silver breeching $43 an ounce.
Although equity markets fell, economic data from the US was positive as a government report showed underlying inflation pressures remained contained in March, while a survey showed April consumer sentiment rose more than expected as the preliminary index of consumer sentiment advanced to 69.6 from 67.5 the prior month and U.S. industrial production at factories rose 0.8 percent in March, the fifth straight gain. Last week's fall in stockmarkets can be attributed to inflation concerns with European debt problems again in focus as Moody's cut Ireland's sovereign rating by two notches to Baa3 and left the outlook negative. Moody's cited an expected decline of the Irish government's financial strength and the country's weaker economic growth outlook as reasons for the downgrade.
This morning, a Greek newspaper report that the government had asked the International Monetary Fund and European Union to start discussions on a restructuring of its debt will not help the markets this week. A Greek finance ministry source said the report was not true. We are in earnings season and this could act as a catalyst to lift the markets should earnings surprise.
On Monday, Asian stockmarkets fell as Japan's core machinery orders fell 2.3 percent from a month earlier in February, with the bigger-than-expected fall during pre-quake conditions raising concerns about the severity of the March 11 quake's impact in the months to come, as investors continued to worry about soaring oil prices although investors ignored news that China said it had posted its first quarterly trade deficit in seven years, despite a narrow surplus in March, as rising commodity prices pushed manufacturers' costs higher. European and US markets mostly fell on investor concerns over the impact higher raw material costs as well the effects of Japan's earthquake on the earnings season. Adding to the worries in the United States was news after the bell that Alcoa Inc revenue missed forecasts, sending its shares down 3.6 percent in post-market trade.
On Tuesday, Asian markets fell after Japan raised the severity of its nuclear crisis, putting it on par with the 1986 Chernobyl disaster. Japan's Nikkei tumbled 2.1 percent on worries about the impact of the March 11 earthquake and tsunami on company results. European and US stockmarkets fell on worries about Japan and first quarter earnings. Commodities ended sharply lower on Tuesday, posting their steepest daily fall in a month after more bearish comments on oil from Goldman Sachs triggered a second day of widespread selling. Oil closed down $3 a barrel in both London and New York after Goldman, a long-time commodities bull, said prices had gotten ahead of fundamentals. Warnings from the International Energy Agency (IEA) and OPEC that high prices would erode global demand also weighed on the market.
On Wednesday, Asian stockmarkets rose with investors looking for fresh opportunities to bet on risky assets after a sharp drop in oil the previous day caused an unwinding of positions. European bourses recovered from Tuesday's sell off on spectular results from JP Morgan. US markets ended a choppy session little changed.
On Thursday, Asian markets fell amid concerns that rising food and fuel costs could undermine consumer demand, hurting economic growth and company profits, although Singapore's gross domestic product grew 23.5 percent quarter-on-quarter on an seasonally-adjusted annualised basis, blowing past even the most bullish forecast in a Reuters poll. European stockmarkets fell as traders reacted to a raft of company news and the lingering eurozone debt crisis. US indices were flat as jobless claims rose by 27,000 to 412,000 in the week to 9 April, a bigger rise than had been expected. Producer prices also rose more than expected. They were up by 0.3% in March, the biggest year-on year increase since August 2009.
On Friday, Asian stockmarkets fell as concern over Chinese inflation rattled the markets. China's economy grew a more-than-estimated 9.7 percent in the first quarter and inflation accelerated in March to the fastest pace since 2008. China’s consumer prices rose 5.4 percent from a year earlier, the statistics bureau said at a briefing in Beijing today. The median forecasts in Bloomberg News surveys of economists were for growth of 9.4 percent and inflation of 5.2 percent. Industrial output increased 14.8 percent year-on-year, exceeding estimates of 14 percent. Gold briefly jumped to another record high of $1,479 an ounce after the dollar fell to its lowest since late 2009 against a basket of major currencies, taking silver to a 31-year high of over $42 an ounce, while inflation pressures in China also helped lift bullion's appeal.
China’s consumer prices rose 5.4 percent from a year earlier, the statistics bureau said at a briefing in Beijing today. The median forecasts in Bloomberg News surveys of economists were for growth of 9.4 percent and inflation of 5.2 percent. Industrial output increased 14.8 percent year-on-year, exceeding estimates of 14 percent. European markets and the Dow and S&P rose as encouraging economic indicators offset some disappointing corporate results, though weakness in Google pressured the Nasdaq. A government report showed underlying inflation pressures remained contained in March, while a survey showed April consumer sentiment rose more than expected.
Last week, equity markets mostly fell with commodity prices flat. The only exceptions were gold and silver which hit new highs as inflation concerns stoked demand. In fact, this morning Gold hit a new high of $1,485 an ounce with silver breeching $43 an ounce.
Although equity markets fell, economic data from the US was positive as a government report showed underlying inflation pressures remained contained in March, while a survey showed April consumer sentiment rose more than expected as the preliminary index of consumer sentiment advanced to 69.6 from 67.5 the prior month and U.S. industrial production at factories rose 0.8 percent in March, the fifth straight gain. Last week's fall in stockmarkets can be attributed to inflation concerns with European debt problems again in focus as Moody's cut Ireland's sovereign rating by two notches to Baa3 and left the outlook negative. Moody's cited an expected decline of the Irish government's financial strength and the country's weaker economic growth outlook as reasons for the downgrade.
This morning, a Greek newspaper report that the government had asked the International Monetary Fund and European Union to start discussions on a restructuring of its debt will not help the markets this week. A Greek finance ministry source said the report was not true. We are in earnings season and this could act as a catalyst to lift the markets should earnings surprise.
Monday, April 11, 2011
Weekly Market Summary
by Raymond Chatlani
On Monday, Asian stockmarkets rose after strong jobs growth in the United States was seen as lifting the prospects for the global economy. European indices closed mixed and flat as major cross-border takeover activity provided support, notably Vivendi's purchase of Vodafone's stake in French mobile phone operator SFR for 7.75 billion euros although banks fell. US markets closed flat among an absence of catalysts.
On Tuesday, Asian stockmarkets fell modestly as Japan began dumping radioactive water from its crippled Fukushima Dai-Ichi nuclear station into the sea to give it room to store more highly contaminated water although markets in China, Hong Kong and Taiwan were closed for a holiday. European and US markets closed slightly lower in subdued trading as Moody's issued its second downgrade on Portugal in less than a month and as traders await this week's European Central Bank interest rate decision. Although China again took advantage of a national holiday to make a surprise 25-bp hike, the fourth in 12-months, silver set a new 31-year peak above $39/oz while gold surpassed the $1450 mark, touching $1456 in after-market trade.
On Wednesday, Asian stockmarkets edged higher calmed by signs of progress in Japan's battle to contain a nuclear crisis as its central bank meets to determine what measures are needed to help the country through its worst disaster since World War II. European shares rose as banks recovered from earlier session falls on the back of a successful Portuguese debt auction and brokers said there was long-term upside for key indexes in Europe. US markets rose modestly as bank shares gained. Later in the evening, Portugal followed Greece and Ireland in requesting an emergency bailout after the country's debts spiralled out of control. Gold temporarily hit a new high of $1,461 an ounce before retreating to $1,454 an ounce.
On Thursday, Asian stockmarkets closed flat on the news of Portugal's bailout and expectations of an ECB interest rate hike of 0.25% later today. European and US markets rose as fewer people applied for unemployment benefits last week in the USA and retailers reported stronger March sales than expected. However, all markets fell into the red at the close as Japan was hit by a massive 7.1 earthquake. Gold hit a new high of $1,466 an ounce with silver breeching $40 an ounce as the dollar weakened against the Euro as the ECB raised the base rate by a quarter percent to 1.25 percent and signalled it was ready to tighten policy further if needed to check rising prices.
On Friday, Asian stockmarkets inched higher as it appeared a strong aftershock in Japan's earthquake-ravaged northeast that hit U.S. and European markets had not done major damage. European markets rose on reassuring reports out of Japan as investors minds were put at ease following yesterday's late sell-off caused by Thursday's magnitude 7.1 aftershock. US indices fell as a spike in oil prices revived worries that inflation would derail the recovery, jolting a market that had been treading water ahead of corporate earnings. Gold hit another new high of over $1,470 an ounce with Silver breeching the $41 an ounce due to the weakening US Dollar.
World markets and commodities rose last week with gold hitting new highs and silver hitting 32 year highs as the US Dollar continued to fall against most cueencies especiaaly the Euro. U.S. crude hit its highest this year, driven largely by unrest in the Middle East. The Euro gained significantly last week as the ECB hiked interest rates by a quarter percent with more expected later this year.
Global indices rose because the US economy recovery keeps improving. In recent weeks we have seen strong and perhaps accelerating economic growth, good profit growth, fair valuations, momentum and high merger and acquisitions activity. But uncertainty arising from world trouble spots shows scant sign of abating and may contain stock prices. Also Ratings agencies warned of trouble ahead for debt-laden Ireland and Japan looked set for a long-haul in containing its nuclear crisis.
On Monday, Asian stockmarkets rose after strong jobs growth in the United States was seen as lifting the prospects for the global economy. European indices closed mixed and flat as major cross-border takeover activity provided support, notably Vivendi's purchase of Vodafone's stake in French mobile phone operator SFR for 7.75 billion euros although banks fell. US markets closed flat among an absence of catalysts.
On Tuesday, Asian stockmarkets fell modestly as Japan began dumping radioactive water from its crippled Fukushima Dai-Ichi nuclear station into the sea to give it room to store more highly contaminated water although markets in China, Hong Kong and Taiwan were closed for a holiday. European and US markets closed slightly lower in subdued trading as Moody's issued its second downgrade on Portugal in less than a month and as traders await this week's European Central Bank interest rate decision. Although China again took advantage of a national holiday to make a surprise 25-bp hike, the fourth in 12-months, silver set a new 31-year peak above $39/oz while gold surpassed the $1450 mark, touching $1456 in after-market trade.
On Wednesday, Asian stockmarkets edged higher calmed by signs of progress in Japan's battle to contain a nuclear crisis as its central bank meets to determine what measures are needed to help the country through its worst disaster since World War II. European shares rose as banks recovered from earlier session falls on the back of a successful Portuguese debt auction and brokers said there was long-term upside for key indexes in Europe. US markets rose modestly as bank shares gained. Later in the evening, Portugal followed Greece and Ireland in requesting an emergency bailout after the country's debts spiralled out of control. Gold temporarily hit a new high of $1,461 an ounce before retreating to $1,454 an ounce.
On Thursday, Asian stockmarkets closed flat on the news of Portugal's bailout and expectations of an ECB interest rate hike of 0.25% later today. European and US markets rose as fewer people applied for unemployment benefits last week in the USA and retailers reported stronger March sales than expected. However, all markets fell into the red at the close as Japan was hit by a massive 7.1 earthquake. Gold hit a new high of $1,466 an ounce with silver breeching $40 an ounce as the dollar weakened against the Euro as the ECB raised the base rate by a quarter percent to 1.25 percent and signalled it was ready to tighten policy further if needed to check rising prices.
On Friday, Asian stockmarkets inched higher as it appeared a strong aftershock in Japan's earthquake-ravaged northeast that hit U.S. and European markets had not done major damage. European markets rose on reassuring reports out of Japan as investors minds were put at ease following yesterday's late sell-off caused by Thursday's magnitude 7.1 aftershock. US indices fell as a spike in oil prices revived worries that inflation would derail the recovery, jolting a market that had been treading water ahead of corporate earnings. Gold hit another new high of over $1,470 an ounce with Silver breeching the $41 an ounce due to the weakening US Dollar.
World markets and commodities rose last week with gold hitting new highs and silver hitting 32 year highs as the US Dollar continued to fall against most cueencies especiaaly the Euro. U.S. crude hit its highest this year, driven largely by unrest in the Middle East. The Euro gained significantly last week as the ECB hiked interest rates by a quarter percent with more expected later this year.
Global indices rose because the US economy recovery keeps improving. In recent weeks we have seen strong and perhaps accelerating economic growth, good profit growth, fair valuations, momentum and high merger and acquisitions activity. But uncertainty arising from world trouble spots shows scant sign of abating and may contain stock prices. Also Ratings agencies warned of trouble ahead for debt-laden Ireland and Japan looked set for a long-haul in containing its nuclear crisis.
Monday, April 4, 2011
Weekly Market Summary
by Raymond Chatlani
On Monday, Asian stockmarkets slipped on persistent anxiety over the tension in the Middle East and in Japan after the destructive quake and tsunami two weeks ago. European markets closed slightly up on low volume. US indices fell slightly as developments in Japan, Libya and the Middle East kept traders wary.
On Tuesday, Asian markets closed mixed with Japan, China, Indonesia and Singapore falling slightly with the rest of Asia gaining. European stockmarkets closed slightly down as capital concerns hit the banks on S & P's downgrades on Portugese and Greek debt. US stocks gained on tech strength and energy shares though volume was light.
On Wednesday, Asian stocks rose as investors were drawn back to riskier assets by attractive valuations, while Japanese exporters were helped by the yen's weakness on expectations of interest rate rises in Europe. European stockmarkets rose on miners. US markets rose as data showed private employers added jobs in a sign of economic improvement and acquisition activity lifted sentiment. Private employers created 201,000 jobs in March, according to ADP Employer Services, a rise that was in line with expectations.
On Thursday, Asian indices rose except for China. European markets fell after Ireland put a 70 Billion Euro price to prevent their banks from going under should conditions deteriorate. US stockmarkets closed mixed and flat although a report showed U.S. jobless claims fell last week and data pointed to improving employment in the Midwest. The U.S. economy probably recorded a second straight month of solid job growth in March, when non-farm payrolls rose by 190,000 according to a Reuters poll, proof the labour market has turned the corner after lagging the broader economic recovery.
Asian shares rose on Friday as markets digested news that China's official purchasing managers' index rose in March from a six-month low, but was still a touch under the Reuters median forecast. European shares rocketed sharply higher and US markets rose as the US unemployment rate fell to a two year low of 8.8%.
Last week was another good week for global equities which have risen two weeks in a row with oil hitting a two and a half year high this morning and gold and silver close to their recent highs. The improvement in the US unemployment rate has been the main catalyst for these gains as investors feel that the US is in the early stages of a sustainable recovery in employment. More jobs means more income and more consumer spending which will encourage corporate companies to expand their businesses
On Monday, Asian stockmarkets slipped on persistent anxiety over the tension in the Middle East and in Japan after the destructive quake and tsunami two weeks ago. European markets closed slightly up on low volume. US indices fell slightly as developments in Japan, Libya and the Middle East kept traders wary.
On Tuesday, Asian markets closed mixed with Japan, China, Indonesia and Singapore falling slightly with the rest of Asia gaining. European stockmarkets closed slightly down as capital concerns hit the banks on S & P's downgrades on Portugese and Greek debt. US stocks gained on tech strength and energy shares though volume was light.
On Wednesday, Asian stocks rose as investors were drawn back to riskier assets by attractive valuations, while Japanese exporters were helped by the yen's weakness on expectations of interest rate rises in Europe. European stockmarkets rose on miners. US markets rose as data showed private employers added jobs in a sign of economic improvement and acquisition activity lifted sentiment. Private employers created 201,000 jobs in March, according to ADP Employer Services, a rise that was in line with expectations.
On Thursday, Asian indices rose except for China. European markets fell after Ireland put a 70 Billion Euro price to prevent their banks from going under should conditions deteriorate. US stockmarkets closed mixed and flat although a report showed U.S. jobless claims fell last week and data pointed to improving employment in the Midwest. The U.S. economy probably recorded a second straight month of solid job growth in March, when non-farm payrolls rose by 190,000 according to a Reuters poll, proof the labour market has turned the corner after lagging the broader economic recovery.
Asian shares rose on Friday as markets digested news that China's official purchasing managers' index rose in March from a six-month low, but was still a touch under the Reuters median forecast. European shares rocketed sharply higher and US markets rose as the US unemployment rate fell to a two year low of 8.8%.
Last week was another good week for global equities which have risen two weeks in a row with oil hitting a two and a half year high this morning and gold and silver close to their recent highs. The improvement in the US unemployment rate has been the main catalyst for these gains as investors feel that the US is in the early stages of a sustainable recovery in employment. More jobs means more income and more consumer spending which will encourage corporate companies to expand their businesses
Subscribe to:
Posts (Atom)
