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.
.
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.