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Markets endured another volatile week, with U.S. markets had a better time than their European counterparts. There were some clear psychological levels in the game Last week, when markets fell to new multi-year low, before recovering in the second half of the week. The Dow hit 11,000 for the first time since July 2006, and the S & P 500 hit 1,200 for the first time since October 2005. The CAC came close to hitting 4000 for the first time since May 2005, the Dax hit 6000 for first time since October 2006 and the FTSE reached its lowest point for over three years.
Markets started the week in promising fashion. News a rescue of the beleaguered U.S. Government sponsored banks Fannie Mae and Freddie Mac, hit the wires on Sunday, which encouraged the financial sector across Europe and the USA. Alliance & Leicester also added cheer when Santander confirmed a takeover proposal, sending shares about 50% on the day. Without however, sellers soon gained traction. A run on regional bank IndyMac Bancorp boosted its fall during the previous weekend, and a takeover by the Federal Deposit Insurance Corporation. Both customers and speculators are pulling their money out of other regional banks, like panic at the prospect of racing in other banks regional.
The FTSE 100 is still one of the worst performance of major global indices last week. The problem for the benchmark UK they have one of the largest weighting in financial stocks and energy of all major exchanges. Oil reserves have been under pressure in the last two days and financial stocks endure a week tortuous. Financial stocks such as Barlcays and RBS were trampled when investors fled the Banking shares and stocks in general. The price of shares in RBS a point below its level at the time of the inauguration of the most touted NatWest. At a time when RBS fell 50 cents below their allowances and Barclays 40p below its share offering. Investors punished UK banks with the greatest exposure to the U.S..
Towards the end of the week, financial stocks recovered strongly. Traders bought the banks, thinking they were pushed into down too far too fast. In the short term, at least, it seems that investors are confident that the banks have been hit far below fair value, and were speaking to pick up some bargains. Better than expected earnings from JP Morgan, Coca Cola, and United Technologies helped fuel the Wednesday / Thursday rally more. Friday, best of expected Citi Group results helped offset some of the disappointing results from Merrill Lynch, Google and Microsoft. The search giant Google saw Pay Per Click slow growth slightly, but said they were in good position for a turn down, as consumers go online in search of bargains.
After the volatility of the past seven days, thankfully next week is so quiet in comparison. The level highest first announcement of note is the BOE, Mervyn King, speaking on Tuesday morning, followed by a member of the FOMC, Plosser, speaking around noon. These speeches take place before the publication of the minutes of the FOMC meeting on Wednesday morning. UK rates is stuck between the policy of fighting inflation and helping the economy in difficult times. The minutes will be analyzed closely. Thursday brings retail sales in the UK, USA and existing home sales. Friday is perhaps the busiest day of the week, with figures for the UK's GDP, followed by U.S. Core durable goods orders and new home sales in the afternoon.
Despite the final rally off lows technical indexes of many, the conditions are still fragile world economy. The U.S. housing market index fell to new lows in July as the U.S. housing collapse continues to show signs of recovery. U.S. CPI figures rose 9.2% yoy. The Consumer prices increased more since 1982, a time when interest rates at 15.5%. These readings of inflation firmly combating argument for a rate cut additional U.S. Government. The stagflation scenario seems to be taking a step closer to reality, as inflation rockets and growth Retail sales U.S. slows to only 0.1%.
The UK is certainly not immune to this, with public sector workers on strike for increases wages below inflation. Jim Rogers of Rogers Holdings hedge fund is known for accurately predicting that gold could hit $ 1,000 and $ 100 oil. He was less optimistic about the state of the economy in the UK. He recently said "The UK economy has the highest inflation rate since 1986 "He implied that the UK government had the tendency to massage the figures, so if we admit that's bad," You know it's really bad. "
Merchants BetOnMarkets believes that the final recovery last week could be a useful point to enter to predict the selling operations will continue. A no touch trade predicting that the FTSE 100 does not touch 6200 any time during the next 6 months could return 21%.
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Article Source: ArticlesBase.com – Stock Markets Endure Another Volatile Week
