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.
Monday, May 23, 2011
Monday, May 16, 2011
Weekly Market Summary
by Raymond Chatlani
On Monday, Asian stockmarkets were lifted by better than expected growth in U.S. jobs and a bounce back in commodity prices. European shares fell as Eurozone debt worries weighed as Standard & Poors cut its rating on Greece by two notches to B from BB-, citing the Mediterranean country's rising default risk. US indexes rose as investors weighed uncertainty about Greece's hefty debt load against a spate of deals news.
On Tuesday, Asian stocks gained after China reported record exports. As a result China's politically-sensitive trade surplus ballooned to $11.4 billion in April and exports hit a record monthly high, as Washington pressured Beijing for a stronger currency. European stockmarkets rose as sentiment towards Greece's debt predicament improved and on a buoyant start to Wall Street. U.S. stocks rose after strong Chinese trade data eased concerns over a slowdown in the world's second-largest economy and pointed to healthy global demand.
On Wednesday, Asian stockmarkets firmed on rising commodity prices which boosted energy and resource stocks, as investors largely shrugged off slightly stronger-than-expected inflation data from China. China's inflation eased in April to 5.3 percent and other data, including for industrial output and loans, suggested the world's second-biggest economy may be cooling and there was less need for further aggressive monetary tightening. European markets fell on a sharper rise in German inflation than expected and as the price of commodities dived. US stockmarkets fell as commodities slid.
On Thursday, Asian share markets tumbled after a second big sell-off in commodities in less than a week curbed investor appetite for riskier investments and boosted the U.S. dollar. European stockmarkets fell, joining a global sell-off after heavy losses in Asia and on Wall Street, as sliding commodity prices dented the resources sector. Sentiment was further rattled after China announced it would raise its bank reserve requirement ratio, stoking concerns about slower economic growth in the Asian powerhouse. U.S. stocks advanced in a volatile session, erasing early losses as a rebound in commodity prices kept the market churning higher.
On Friday, Asian stockmarkets rose as bargain hunting investors bought. European markets fell although data showed that Germany, Europe's largest economy, grew by a startling 1.5 percent in the first three months of the year, with France only paling a little in comparison, growing by 1.0 percent. US indices fell as investors continued to reduce investment in risky assets.
Last week, global markets and commodities continued to fall on Greek's resurfacing debt crisis, fears of high inflation in developing markets and concerns of slowing economic growth in the USA. As investors continued to flee into the US Dollar, commodities continued to sell off. Investors are divided as to the future direction of the markets.
Bullish investors see inflation as being strong and point out that first quarter earnings have been strong with almost three quarters of reporting companies beating Wall Street's estimates and that revenue strong has been sturdy. The bears point out that the Federal Reserve's $600 billion program to buy Treasury debt has helped investors divert funds to commodities and equities, creating a bubble in those assets, which is now starting to burst.
With the summer months ahead which is usually a slow time for the markets, we may now be entering a period where investors are paring their positions to take profits and re-enter the markets in the fall. Our view is that as long as interest rates remain below inflation, then we shall continue to see global equiities and commodities rise though there may be weakness over the summer months.
On Monday, Asian stockmarkets were lifted by better than expected growth in U.S. jobs and a bounce back in commodity prices. European shares fell as Eurozone debt worries weighed as Standard & Poors cut its rating on Greece by two notches to B from BB-, citing the Mediterranean country's rising default risk. US indexes rose as investors weighed uncertainty about Greece's hefty debt load against a spate of deals news.
On Tuesday, Asian stocks gained after China reported record exports. As a result China's politically-sensitive trade surplus ballooned to $11.4 billion in April and exports hit a record monthly high, as Washington pressured Beijing for a stronger currency. European stockmarkets rose as sentiment towards Greece's debt predicament improved and on a buoyant start to Wall Street. U.S. stocks rose after strong Chinese trade data eased concerns over a slowdown in the world's second-largest economy and pointed to healthy global demand.
On Wednesday, Asian stockmarkets firmed on rising commodity prices which boosted energy and resource stocks, as investors largely shrugged off slightly stronger-than-expected inflation data from China. China's inflation eased in April to 5.3 percent and other data, including for industrial output and loans, suggested the world's second-biggest economy may be cooling and there was less need for further aggressive monetary tightening. European markets fell on a sharper rise in German inflation than expected and as the price of commodities dived. US stockmarkets fell as commodities slid.
On Thursday, Asian share markets tumbled after a second big sell-off in commodities in less than a week curbed investor appetite for riskier investments and boosted the U.S. dollar. European stockmarkets fell, joining a global sell-off after heavy losses in Asia and on Wall Street, as sliding commodity prices dented the resources sector. Sentiment was further rattled after China announced it would raise its bank reserve requirement ratio, stoking concerns about slower economic growth in the Asian powerhouse. U.S. stocks advanced in a volatile session, erasing early losses as a rebound in commodity prices kept the market churning higher.
On Friday, Asian stockmarkets rose as bargain hunting investors bought. European markets fell although data showed that Germany, Europe's largest economy, grew by a startling 1.5 percent in the first three months of the year, with France only paling a little in comparison, growing by 1.0 percent. US indices fell as investors continued to reduce investment in risky assets.
Last week, global markets and commodities continued to fall on Greek's resurfacing debt crisis, fears of high inflation in developing markets and concerns of slowing economic growth in the USA. As investors continued to flee into the US Dollar, commodities continued to sell off. Investors are divided as to the future direction of the markets.
Bullish investors see inflation as being strong and point out that first quarter earnings have been strong with almost three quarters of reporting companies beating Wall Street's estimates and that revenue strong has been sturdy. The bears point out that the Federal Reserve's $600 billion program to buy Treasury debt has helped investors divert funds to commodities and equities, creating a bubble in those assets, which is now starting to burst.
With the summer months ahead which is usually a slow time for the markets, we may now be entering a period where investors are paring their positions to take profits and re-enter the markets in the fall. Our view is that as long as interest rates remain below inflation, then we shall continue to see global equiities and commodities rise though there may be weakness over the summer months.
Monday, May 9, 2011
Weekly Market Summary
by Raymond Chatlani
On Monday, Asian markets tracked Wall Street higher although stock trading in Asia was thin amid a slew of holidays this week in the region. Hong Kong's Hang Seng index and mainland China's Shanghai Composite Index were closed for holidays as were stock markets in Taiwan, Malaysia and Singapore. Commodity shares retreated with silver falling 10 percent to $45 an ounce as the US Dollar strengthened on news that Osama Bin Laden was killed in Pakistan in a U.S.-led operation. European stocks edged up on merger activity and Bin Laden's death. US stocks rose following Bin Laden's death but ended lower at the end of the session as energy shares fell.
On Tuesday, Asian stockmarkets dipped as a bounce following the killing of Osama bin Laden by U.S. forces quickly faded and investors refocused their attention on the fragile global economy. European indexes fell after European producer prices in March grew a bit faster than expected. Factory gate prices in the euro zone were 6.7% higher in March than a year earlier, after registering a 6.6% annual increase in February. US markets fell after several companies reported weak earnings.
On Wednesday, Asian stockmarkets fell with soft commodity prices making investors nervous that a broader pullback in risk taking may be unfolding. European markets fell as investors dropped commodity-related shares and The European Union's statistics office Eurostat said retail sales in the 17 countries using the euro fell 1.0 percent month-on-month in March for a 1.7 percent year-on-year drop. U.S. stocks added to losses after the Institute for Supply Management's non-manufacturing index came in weaker than expected.
On Thursday, Asian stockmarkets closed mixed as commodity shares fell offset by rising technology and consumer shares. European stock markets slid following a clutch of disappointing earnings updates from the region's banks and ahead of interest rate decisions in Britain. Britain's state-rescued Lloyds Banking Group reported on Thursday a net loss of £2.4 billion after setting aside a vast sum to compensate clients who were mis-sold payment insurance. In Paris, Societe Generale slumped 4.10 percent to 43.68 euros after the lender announced first-quarter net profits of 916 million euros ($1.36 billion), a 13.8 percent drop on the same period last year. US markets fell as new jobless claims fell to a 8 month high. Initial claims for state unemployment benefits rose 43,000 to a seasonally adjusted 474,000, the highest since mid-August, the Labor Department said on Thursday.
On Friday, Asian stocks declined, dragging the region’s benchmark index to its steepest weekly drop in seven, following the biggest slump in commodities since 2009 and before a report today forecast to show slowing U.S. jobs growth. European and US stockmarkets rocketed and commodities recovered as the Labor Department reported that the economy added 244,000 jobs overall last month, well above the 185,000 jobs that analysts had predicted.
Last week stocks and commodities fell as investors took profits on weak corporate profits and as the US Dollar strenghtened on the news of Bin Laden's death. Investors weighed trades cautiously as analysts warned that inflation remained a major drag on the region despite various actions by central banks in China, India, South Korea and elsewhere to cool rising prices by raising interest rates and taking other steps to reduce the amount of money sloshing around their economies. In commodities, silver dominated the news with a fall of around 30 percent to $35 an ounce.
On Tuesday, China's central bank said its top priorities were stabilizing consumer prices and managing inflation expectations. The same day, India's central bank raised its key interest rate, its ninth hike in just over a year, and warned that persistent inflation is threatening growth in Asia's third-largest economy.
On Friday, markets and commodities recovered on the strong jobs report in the USA where investors felt that the selloff last week was overdone.
On Monday, Asian markets tracked Wall Street higher although stock trading in Asia was thin amid a slew of holidays this week in the region. Hong Kong's Hang Seng index and mainland China's Shanghai Composite Index were closed for holidays as were stock markets in Taiwan, Malaysia and Singapore. Commodity shares retreated with silver falling 10 percent to $45 an ounce as the US Dollar strengthened on news that Osama Bin Laden was killed in Pakistan in a U.S.-led operation. European stocks edged up on merger activity and Bin Laden's death. US stocks rose following Bin Laden's death but ended lower at the end of the session as energy shares fell.
On Tuesday, Asian stockmarkets dipped as a bounce following the killing of Osama bin Laden by U.S. forces quickly faded and investors refocused their attention on the fragile global economy. European indexes fell after European producer prices in March grew a bit faster than expected. Factory gate prices in the euro zone were 6.7% higher in March than a year earlier, after registering a 6.6% annual increase in February. US markets fell after several companies reported weak earnings.
On Wednesday, Asian stockmarkets fell with soft commodity prices making investors nervous that a broader pullback in risk taking may be unfolding. European markets fell as investors dropped commodity-related shares and The European Union's statistics office Eurostat said retail sales in the 17 countries using the euro fell 1.0 percent month-on-month in March for a 1.7 percent year-on-year drop. U.S. stocks added to losses after the Institute for Supply Management's non-manufacturing index came in weaker than expected.
On Thursday, Asian stockmarkets closed mixed as commodity shares fell offset by rising technology and consumer shares. European stock markets slid following a clutch of disappointing earnings updates from the region's banks and ahead of interest rate decisions in Britain. Britain's state-rescued Lloyds Banking Group reported on Thursday a net loss of £2.4 billion after setting aside a vast sum to compensate clients who were mis-sold payment insurance. In Paris, Societe Generale slumped 4.10 percent to 43.68 euros after the lender announced first-quarter net profits of 916 million euros ($1.36 billion), a 13.8 percent drop on the same period last year. US markets fell as new jobless claims fell to a 8 month high. Initial claims for state unemployment benefits rose 43,000 to a seasonally adjusted 474,000, the highest since mid-August, the Labor Department said on Thursday.
On Friday, Asian stocks declined, dragging the region’s benchmark index to its steepest weekly drop in seven, following the biggest slump in commodities since 2009 and before a report today forecast to show slowing U.S. jobs growth. European and US stockmarkets rocketed and commodities recovered as the Labor Department reported that the economy added 244,000 jobs overall last month, well above the 185,000 jobs that analysts had predicted.
Last week stocks and commodities fell as investors took profits on weak corporate profits and as the US Dollar strenghtened on the news of Bin Laden's death. Investors weighed trades cautiously as analysts warned that inflation remained a major drag on the region despite various actions by central banks in China, India, South Korea and elsewhere to cool rising prices by raising interest rates and taking other steps to reduce the amount of money sloshing around their economies. In commodities, silver dominated the news with a fall of around 30 percent to $35 an ounce.
On Tuesday, China's central bank said its top priorities were stabilizing consumer prices and managing inflation expectations. The same day, India's central bank raised its key interest rate, its ninth hike in just over a year, and warned that persistent inflation is threatening growth in Asia's third-largest economy.
On Friday, markets and commodities recovered on the strong jobs report in the USA where investors felt that the selloff last week was overdone.
Tuesday, May 3, 2011
Weekly Market Summary
by Raymond Chatlani
On Monday, Asian stockmarkets mostly rose following last week's good corporate results though China fell on inflation fears. European markets were closed. US markets faltered on discouraging corporate earnings forecasts. Gold and silver retreated after hitting new 2011 highs of $1508.70 and $47.15 an ounce respectively.
On Tuesday, Asian stocks and commodities pulled back from recent three-year highs in a bout of profit-taking before the Federal Reserve meeting this week where investors are seeking clues on when it plans to begin existing its ultra-easy monetary policy. European markets rose buoyed by strong results from Swiss banking giant UBS after profits for the first quarter came in ahead of expectations, helped by big inflows from wealthy customers. US stockmarkets rose on strong results from Ford and 3M as Ford reported its best first quarter earnings since 1998 and 3M said quarterly profit jumped 16 percent from a year ago, beating analysts' estimates.
On Wednesday, Asian stockmarkets closed mixed with Australia, Hong Kong, China and India falling and the rest of the region gaining. European equities rose on good company results as investors digested results from energy giant BP, Barclays bank and telecom equipment giant Ericsson, alongside positive British data. US markets rose after U.S. Federal Reserve Chief Ben Bernanke gave no signs that the central bank was about to tighten monetary policy. Gold rose to an all-time high over $1,530 an ounce with silver at over $48 an ounce and oil also went up after the Federal Reserve vowed to keep U.S. interest rates low for an extended period, which sent the dollar tumbling.
On Thursday, Asian stocks rose after the U.S. central bank signalled it was in no rush to scale back support for the economy, keeping intact demand for riskier assets. European stockmarkets rose as investors welcomed the US Federal Reserve's commitment to keep interest rates low, and digested upbeat German unemployment data and company results. US equities rose modestly as the economy grew from January through March at an annualized rate of 1.8%, which is greater than the 1.7% increase that had been broadly expected although initial claims for the week ended April 23 totaled 429,000, which is greater than the 390,000 initial claims that had been expected, on average, among economists surveyed by Briefing.com. Gold hit a new high of $1,538 an ounce before retreating with silver temporarily hitting a new all time high at over $49 an ounce.
On Friday, Asian stockmarkets fell as a slowdown in growth in the U.S. and mixed corporate earnings dampened stock market sentiment. European markets rose supported by positive company earnings. US indices rose on strong quarterly results from Caterpillar and Merck. Gold hit a new high again of over $1,560 an ounce.
Last week's major event was confirmation by the US Federal Reserve Bank that low interest rates are here to stay for a prolonged period. This has led investors to come out of cash and bonds and to push global stockmarkets and commodities higher due to inflation expectations.
The Federal Reserve Bank is sticking to its policy, and, as a result, we have to expect the continued devaluation of the dollar and the appreciation of commodities to remain intact. In fact, both gold and silver hit new highs last week.
On Monday, Asian stockmarkets mostly rose following last week's good corporate results though China fell on inflation fears. European markets were closed. US markets faltered on discouraging corporate earnings forecasts. Gold and silver retreated after hitting new 2011 highs of $1508.70 and $47.15 an ounce respectively.
On Tuesday, Asian stocks and commodities pulled back from recent three-year highs in a bout of profit-taking before the Federal Reserve meeting this week where investors are seeking clues on when it plans to begin existing its ultra-easy monetary policy. European markets rose buoyed by strong results from Swiss banking giant UBS after profits for the first quarter came in ahead of expectations, helped by big inflows from wealthy customers. US stockmarkets rose on strong results from Ford and 3M as Ford reported its best first quarter earnings since 1998 and 3M said quarterly profit jumped 16 percent from a year ago, beating analysts' estimates.
On Wednesday, Asian stockmarkets closed mixed with Australia, Hong Kong, China and India falling and the rest of the region gaining. European equities rose on good company results as investors digested results from energy giant BP, Barclays bank and telecom equipment giant Ericsson, alongside positive British data. US markets rose after U.S. Federal Reserve Chief Ben Bernanke gave no signs that the central bank was about to tighten monetary policy. Gold rose to an all-time high over $1,530 an ounce with silver at over $48 an ounce and oil also went up after the Federal Reserve vowed to keep U.S. interest rates low for an extended period, which sent the dollar tumbling.
On Thursday, Asian stocks rose after the U.S. central bank signalled it was in no rush to scale back support for the economy, keeping intact demand for riskier assets. European stockmarkets rose as investors welcomed the US Federal Reserve's commitment to keep interest rates low, and digested upbeat German unemployment data and company results. US equities rose modestly as the economy grew from January through March at an annualized rate of 1.8%, which is greater than the 1.7% increase that had been broadly expected although initial claims for the week ended April 23 totaled 429,000, which is greater than the 390,000 initial claims that had been expected, on average, among economists surveyed by Briefing.com. Gold hit a new high of $1,538 an ounce before retreating with silver temporarily hitting a new all time high at over $49 an ounce.
On Friday, Asian stockmarkets fell as a slowdown in growth in the U.S. and mixed corporate earnings dampened stock market sentiment. European markets rose supported by positive company earnings. US indices rose on strong quarterly results from Caterpillar and Merck. Gold hit a new high again of over $1,560 an ounce.
Last week's major event was confirmation by the US Federal Reserve Bank that low interest rates are here to stay for a prolonged period. This has led investors to come out of cash and bonds and to push global stockmarkets and commodities higher due to inflation expectations.
The Federal Reserve Bank is sticking to its policy, and, as a result, we have to expect the continued devaluation of the dollar and the appreciation of commodities to remain intact. In fact, both gold and silver hit new highs last week.
Monday, May 2, 2011
Weekly Market Summary
By Raymond Chatlani
On Monday, Asian stockmarkets mostly rose following last week's good corporate results though China fell on inflation fears. European markets were closed. US markets faltered on discouraging corporate earnings forecasts. Gold and silver retreated after hitting new 2011 highs of $1508.70 and $47.15 an ounce respectively.
On Tuesday, Asian stocks and commodities pulled back from recent three-year highs in a bout of profit-taking before the Federal Reserve meeting this week where investors are seeking clues on when it plans to begin existing its ultra-easy monetary policy. European markets rose buoyed by strong results from Swiss banking giant UBS after profits for the first quarter came in ahead of expectations, helped by big inflows from wealthy customers. US stockmarkets rose on strong results from Ford and 3M as Ford reported its best first quarter earnings since 1998 and 3M said quarterly profit jumped 16 percent from a year ago, beating analysts' estimates.
On Wednesday, Asian stockmarkets closed mixed with Australia, Hong Kong, China and India falling and the rest of the region gaining. European equities rose on good company results as investors digested results from energy giant BP, Barclays bank and telecom equipment giant Ericsson, alongside positive British data. US markets rose after U.S. Federal Reserve Chief Ben Bernanke gave no signs that the central bank was about to tighten monetary policy. Gold rose to an all-time high over $1,530 an ounce with silver at over $48 an ounce and oil also went up after the Federal Reserve vowed to keep U.S. interest rates low for an extended period, which sent the dollar tumbling.
On Thursday, Asian stocks rose after the U.S. central bank signalled it was in no rush to scale back support for the economy, keeping intact demand for riskier assets. European stockmarkets rose as investors welcomed the US Federal Reserve's commitment to keep interest rates low, and digested upbeat German unemployment data and company results. US equities rose modestly as the economy grew from January through March at an annualized rate of 1.8%, which is greater than the 1.7% increase that had been broadly expected although initial claims for the week ended April 23 totaled 429,000, which is greater than the 390,000 initial claims that had been expected, on average, among economists surveyed by Briefing.com. Gold hit a new high of $1,538 an ounce before retreating with silver temporarily hitting a new all time high at over $49 an ounce.
On Friday, Asian stockmarkets fell as a slowdown in growth in the U.S. and mixed corporate earnings dampened stock market sentiment. European markets rose supported by positive company earnings. US indices rose on strong quarterly results from Caterpillar and Merck. Gold hit a new high again of over $1,560 an ounce.
Last week's major event was confirmation by the US Federal Reserve Bank that low interest rates are here to stay for a prolonged period. This has led investors to come out of cash and bonds and to push global stockmarkets and commodities higher due to inflation expectations.
The Federal Reserve Bank is sticking to its policy, and, as a result, we have to expect the continued devaluation of the dollar and the appreciation of commodities to remain intact. In fact, both gold and silver hit new highs last week.
Kind regards,
Raymond Chatlani
Investment Analyst
Hollingsworth International Financial Services Ltd
Office 22
Regent House
Bisazza Street
Sliema SLM1641
Malta
Tel : +356 21316298
Fax : +356 21316299
Mob: +356 79619448
www.hollingsworth.eu.com
--------------------------------------------------------------------------------
Hollingsworth International Financial Services is licensed by the MFSA to provide investment services under the Investment Services Act 1994. Enrolled Insurance Broker under article 13 of the Insurance Intermediaries Act (Cap. 487) 2006. Registration License No. C32457
On Monday, Asian stockmarkets mostly rose following last week's good corporate results though China fell on inflation fears. European markets were closed. US markets faltered on discouraging corporate earnings forecasts. Gold and silver retreated after hitting new 2011 highs of $1508.70 and $47.15 an ounce respectively.
On Tuesday, Asian stocks and commodities pulled back from recent three-year highs in a bout of profit-taking before the Federal Reserve meeting this week where investors are seeking clues on when it plans to begin existing its ultra-easy monetary policy. European markets rose buoyed by strong results from Swiss banking giant UBS after profits for the first quarter came in ahead of expectations, helped by big inflows from wealthy customers. US stockmarkets rose on strong results from Ford and 3M as Ford reported its best first quarter earnings since 1998 and 3M said quarterly profit jumped 16 percent from a year ago, beating analysts' estimates.
On Wednesday, Asian stockmarkets closed mixed with Australia, Hong Kong, China and India falling and the rest of the region gaining. European equities rose on good company results as investors digested results from energy giant BP, Barclays bank and telecom equipment giant Ericsson, alongside positive British data. US markets rose after U.S. Federal Reserve Chief Ben Bernanke gave no signs that the central bank was about to tighten monetary policy. Gold rose to an all-time high over $1,530 an ounce with silver at over $48 an ounce and oil also went up after the Federal Reserve vowed to keep U.S. interest rates low for an extended period, which sent the dollar tumbling.
On Thursday, Asian stocks rose after the U.S. central bank signalled it was in no rush to scale back support for the economy, keeping intact demand for riskier assets. European stockmarkets rose as investors welcomed the US Federal Reserve's commitment to keep interest rates low, and digested upbeat German unemployment data and company results. US equities rose modestly as the economy grew from January through March at an annualized rate of 1.8%, which is greater than the 1.7% increase that had been broadly expected although initial claims for the week ended April 23 totaled 429,000, which is greater than the 390,000 initial claims that had been expected, on average, among economists surveyed by Briefing.com. Gold hit a new high of $1,538 an ounce before retreating with silver temporarily hitting a new all time high at over $49 an ounce.
On Friday, Asian stockmarkets fell as a slowdown in growth in the U.S. and mixed corporate earnings dampened stock market sentiment. European markets rose supported by positive company earnings. US indices rose on strong quarterly results from Caterpillar and Merck. Gold hit a new high again of over $1,560 an ounce.
Last week's major event was confirmation by the US Federal Reserve Bank that low interest rates are here to stay for a prolonged period. This has led investors to come out of cash and bonds and to push global stockmarkets and commodities higher due to inflation expectations.
The Federal Reserve Bank is sticking to its policy, and, as a result, we have to expect the continued devaluation of the dollar and the appreciation of commodities to remain intact. In fact, both gold and silver hit new highs last week.
Kind regards,
Raymond Chatlani
Investment Analyst
Hollingsworth International Financial Services Ltd
Office 22
Regent House
Bisazza Street
Sliema SLM1641
Malta
Tel : +356 21316298
Fax : +356 21316299
Mob: +356 79619448
www.hollingsworth.eu.com
--------------------------------------------------------------------------------
Hollingsworth International Financial Services is licensed by the MFSA to provide investment services under the Investment Services Act 1994. Enrolled Insurance Broker under article 13 of the Insurance Intermediaries Act (Cap. 487) 2006. Registration License No. C32457
Tuesday, April 26, 2011
Weekly Market Summary
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.
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.
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.
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