Weekly Market Summary

by Raymond Chatlani

On Monday, Asian stockmarkets fell before an important European meeting today on resolving Greek's debt crisis upon news that the head of the International Monetary Fund, Dominique Strauss-Kahn would not be present for the talks as he was arrested in New York for an alleged sexual attack on a hotel maid. Europe's stock market indices closed uniformly lower on the Greek sovereign debt crisis with european banks bearing the brunt of the sell-off. US markets had a gradual decline while the Nasdaq suffered a sharper slide that left it with a loss that was more than double that of the S&P 500 and about four times that of the Dow.

On Tuesday, Asian stockmarkets were steady and closed slightly higher. European markets fell on speculation of Greece's debt restructuring. US indices fell, pressured by a negative outlook from Hewlett-Packard Co, the world's largest technology company, and weak U.S. housing data. Groundbreaking for new housing dropped 10.6 percent to an annual rate of 523,000 units as a glut of homes on the market discouraged new projects, a Commerce Department report showed

On Wednesday, Asian stockmarkets all rose except for India, led by consumer stocks. European indexes seemed to celebrate the European Central Bank's decision to reject a Greek restructuring, as major benchmark indices across the continent finished higher. US markets rose on widespread gains in commodity prices which lifted energy and materials companies.

On Thursday, Asian stockmarkets rose on expectations that commodities have resumed an uptrend. European markets rose in a broad market rally but ended off their highs after mixed U.S. economic data, and some strategists said equities might be stuck in a range until the macro picture improves. US indices rose as the number of Americans filing new claims for jobless benefits fell last week, but other data on home sales and regional factory activity suggested the economy remained on a moderate growth path.

On Friday, Asian markets fell slightly on tepid US economic data showing that the US economy may not be as robust as previously thought. European stockmarkets were lifted by social networking site LinkedIn whose IPO price closed more than double but markets tanked at the close as Fitch ratings agency downgraded Greece's long-term credit rating further into junk status, in yet another blow to the debt-ridden country. US markets fell as market sentiment remained fragile due to the debate about possible solutions to Greece's debt problems, with the main market worry that any restructuring could have contagion effects beyond Greece's borders.

Last week global markets and commodities fell on signs of a slowing economy in the U.S. and concerns that Greece will default on its debt. On Friday, Fitch downgraded Greece’s credit rating to B+ from BB+, four notches below investment grade. On Saturday, Standard & Poors cut its ratings outlook for Italy's debt from stable to negative, citing the country's poor growth prospects and concerns about the government's ability to reduce public borrowing.
Markets are going through "a global correction" because of slowing growth in China, the contraction of Japan's economy and Europe's debt problems. Also, the relatively weak U.S. economic data and the tightening of money markets mean people are getting nervous and reluctant to take long positions in the market.

This correction may continue for a number of weeks especially if Greek contaign spreads.