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.
Monday, September 26, 2011
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.
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