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Syndicate
Nov
5
Global Markets Trade Cautiously as US Votes
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Stock markets in Asia and Europe gave mixed performances on Tuesday in a cautious response to the presidential elections taking place in United States on November 4.
While the Wall Street closed with a relatively flat finish ahead of the US presidential elections, stock markets across the world traded cautiously as everyone waited to see who would win the race to the White House.
Japan’s market opened positively after it was closed on Monday for a national holiday and Tokyo’s Nikkei 225 index gained 538 points or 6%. Hong Kong’s Hang Seng Index added 0.3% to 14,384 after fluctuating throughout Tuesday and South Korea’s Kospi rose by 2%. however benchmark indices in Shanghai and Singapore fell and in mainland China the market dropped for the third day led by mining and metal stocks.
Australia’s S&P/ASX 200 index shook off initial losses to close almost flat after the country’s central bank slashed key interest rates by 0.75 of a percentage point, exceeding most analysts’ estimates of a half-percentage point. The Australian Reserve Bank cut interest rates amidst recent data pointing to growing evidence of an economic slowdown in the country.
Stock markets across the world have gone through some of the most chaotic times in past few weeks as the impact of the global financial crisis eroded investors’ confidence.
Sep
29
Crude oil fell by taking signals of investors concerns over the U.S. government bailout plan
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Declining stock indexes indicating investor anxiety over a U.S. government bailout plan for financial companies resulted week’s first fall in crude oil cutting back last day’s record gain.
Assumption regarding slowing U.S. economy growth will cut energy demand resulted fall in the Europe’s Dow Jones Stoxx 600 Index and as an outcome Oil also dropped.
A senior broker at Bache Commodities Ltd. stated that there is fight between the intensity from the softer dollar and the possibility of added turn down in demand because stock markets throughout the world is plunging again.
In electronic trading on the New York Mercantile Exchange crude oil for November delivery turned down as far as $2.61, or 2.4 percent, to $106.76 a barrel.
On the Nymex October contract went up $16.37, or 17 percent, to conclude at $120.92 a barrel yesterday. As oil fell near to $90, traders who sold the October contract last week buy the futures back as a result in intraday trading it touched $130.
On concern the U.S. bailout package, which would buy assets from financial firms, would inflate the budget deficit dollar knock down about $1.4866 yesterday.
Sep
29
Crude oil fell by taking signals of investors concerns over the U.S. government bailout plan
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Declining stock indexes indicating investor anxiety over a U.S. government bailout plan for financial companies resulted week’s first fall in crude oil cutting back last day’s record gain.
Assumption regarding slowing U.S. economy growth will cut energy demand resulted fall in the Europe’s Dow Jones Stoxx 600 Index and as an outcome Oil also dropped.
A senior broker at Bache Commodities Ltd. stated that there is fight between the intensity from the softer dollar and the possibility of added turn down in demand because stock markets throughout the world is plunging again.
In electronic trading on the New York Mercantile Exchange crude oil for November delivery turned down as far as $2.61, or 2.4 percent, to $106.76 a barrel.
On the Nymex October contract went up $16.37, or 17 percent, to conclude at $120.92 a barrel yesterday. As oil fell near to $90, traders who sold the October contract last week buy the futures back as a result in intraday trading it touched $130.
On concern the U.S. bailout package, which would buy assets from financial firms, would inflate the budget deficit dollar knock down about $1.4866 yesterday.
Sep
22
Paulson advised to approve $700 billion plan quickly to save the crumbling market
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On Sunday Treasury Secretary Henry Paulson said that quick approval of the rescue plane is required urgently to calm down the financial system and protect the economy and taxpayers, and asked lawmakers to act quickly on the plan for the rescue of U.S market.
Henry Paulson stated that because of the financial crisis taxpayers are at risk. He added that $700 billion plan to buy bad mortgage assets off of companies’ books will be helpful. In an interview he stated that not doing this is more risky than doing it. Further he added that this is urgent requirement and they want to do this quickly.
According to the proposed legislation plan permits the government to buy the bad debt of U.S. financial institutions for the next two years.
Treasury secretary get authority to buy $700 billion in mortgage related assets under the proposed plan and would make higher the statutory limit on the national debt from $10.6 trillion to $11.3 trillion.
Sep
19
Investors, who were encouraged by signs of further steps by the government to stop the problems plaguing the financial markets, rushed backed into trampled down banking shares on Thursday, which bring an exited end for fluctuating day on Wall Street.
Dow Jones industrials surged to a 410-point gain in the final hour of trading on Thursday removing almost 449-point loss continued on Wednesday.
Though, this little improvement does not indicate the end of Wall Street worries.
Other remaining concerns regarding financial market health is signaled by the fears and stress developed in the credit markets. Banks charged each other higher loan rates and the worried investors flocked to the safety of Treasury bills.
Lending to consumers and some businesses has tightened that affected their spending most. Jane Caron, chief economic strategist at Dwight Asset Management, a bond investment firm stated that investors are still worried as they did not have seen the end of this crisis.
The Dow Jones industrial average went up 3.86 percent, to 11,019.69 while The Standard & Poor’s 500-stock index closed up 4.33 percent.
Though according to some economists, this recovery is due to boosting expectations among investors regarding government might be preparing to quarantine some of the most horrible assets held by major banks, rather than to an original enhancement in the financial environment.
Sep
19
Withdrawals from Funds emerged as new worry for the financial market
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On Thursday U.S. stock market boosted as investors see the hope that government might take some significant steps to solve out financial market problems but there is another problem wrapping the financial market.
In an effort to ease out worried financial market the Federal Reserve, ECB and other major central banks pumped hundreds of billions in the commercial banks through out the glob in the way of added loans. But these steps contribute a little to lessen the growing problems.
Worried investors are pulling back their money from the money market funds which are one of the most important finance sources for the banks and companies. As well as the commercial banks stored the cash in the course of ambiguity regarding what will be the effect of this week’s financial havoc on them and their trading partners.
According to Crane Data LLC on Wednesday a hefty $78.7 billion was withdrawn from the largest money market fund. Money market fund drive cash in the credit market by buying commercial papers from the banks. Commercial papers are short term IOUs issued by banks and companies.
Because of the market-wide liquidity issues, Putnam Prime Money Market Fund would distribute its assets to customers and closed on Wednesday, it stated.
The withdraw from the money market funds which are considered safe lace for money, started with the statement that Reserve Primary Fund’s net asset value has plunged below $1 per share earlier this week.
Sep
19
Morgan Stanley and Goldman Sachs also losing shares amid financially weak environment
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Two remaining titans of Wall Street Morgan Stanley and Goldman Sachs are also not protected and see fall in there shares surprisingly in a wake of fading investors confidence on Wednesday.
The stocks of these commanding companies were strained into the crisis of investor confidence last day.
Merger plans with Wachovia or another bank were being considered by Morgan Stanley, whose stock knock down approximately 25 percent.
On the other side Goldman Sachs refused rumors that it was in quest of a capital assortment while its shares fell about 14 percent.
This fall came after the day when both of these powerful companies reported highly regarded profits on Tuesday that put them in a different category of companies in contrast to weaker banks like Bear Stearns and Lehman Brothers that saw fading business values recently. This situation in both the companies indicates that how rapidly a sense of fear is spreading through Wall Street.
While Morgan Stanley’s merger plan with banks would leave Goldman Sachs as the last major American investment bank after a global financial crisis it would also help Morgan to restore its structure during the Depression, when the firm split from the Morgan banking empire.
This global financial crisis exhausted the strength of the most risk-taking industry in the world and brought it to the base.
Lehman’s failure also gripped Morgan Stanley into the trap of fears that already wrapped up the market. But just a day before it issued a fair profit report that assured that it is positive for its future.
Goldman Sachs made $11.6 billion previous year and has not declared a loss during the credit crisis that probably makes it less pressurized compared to its competitors that are not performing up to the expectations.
Sep
17
Goldman, Morgan Stanley profits fell but beat expectations in the course of slump
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Even though the worst market slump in decades distressed Wall Street, Goldman Sachs Group Inc and Morgan Stanley- two biggest U.S. investment banks reported lower quarterly profits but those were better than the expectations.
The largest securities firm, Goldman Sachs reported that its shares fell to its three years low as they fell 2.5 percent in after noon trading as well as its third quarter income knock down 70 percent on weaker-than-expected revenues.
Even as it recorded $1.1 billion in write-downs and losses from its principal investments it stands and beat the profit expectations amid slump. It was the largest earnings drop since Goldman went public in 1999.
As the year-old credit crisis decelerated deal activity and formed one of the toughest trading environments in decades, number two Morgan’s earnings fell 3 percent.
On Tuesday in regular trading its shares went down 11 percent; however they scale down a large amount of those losses in electronic trading after New York markets closed. Morgan produced an advanced return on equity and easily earned better against its competitors. Marshall Front, chairman at Front Barnett Associates stated it as a good news for whole financial sector.
Also about $1.1 billion of losses and charges from mortgage trades, investments, leveraged buyout loans and repurchase of illiquid auction rate securities were absorbed by Morgan.
This lower quarterly profit results come after the collapse in Lehman and broker Merrill Lynch & Co Inc meanwhile rushed into the arms of Bank of America Corp to avoid a similar fate that holds No. 4 and No.3 rank.
Sep
16
Amid the concern regarding slowing economy and slackening oil demand that were raised by taking support of Wall Street’s woes, oil prices plunged sharply after over six months in triple-digit territory and traded below the symbolic $100-a-barrel on Monday.
In New York Oil futures touched its lowest level since February and settled at $95.71 a barrel, downward $5.47.
While gasoline prices soared due to hurricane Ike disrupted refineries and were up 16 cents a gallon nationwide in recent days, oil fell to new record.
Though hurricane Ike cause very minor damages to oil platforms in the Gulf of Mexico and to refineries along the coast, refineries had to remain shut down in advance of the storm, and many have yet to restart because of power failures.
In July oil prices topped at $145.29 a barrel but as oil consumption has slowed markedly in Western countries it have since been falling.
Some analysts assume that because of the crisis on Wall Street and the darkening economic outlook oil prices are expected to continue the slip in coming weeks. Adam E. Sieminski, chief energy economist at Deutsche Bank stated that Wall Street now has everybody worried about the global economy.
Previously in the beginning of the year analysts predicted that swelling demand and the limited growth in new supplies would push oil prices to $200 a barrel by the end of the year.
On Monday President Bush said hurricane had created an upward stress on prices. In some parts of the country, shortages pushed gas over $5 a gallon.
Sep
15
Asia’s largest financial markets were closed for a major holiday though fall in dollar results decline in the half dozen stock markets in the region that were open along with decline in futures contracts on American stocks.
On Monday investors those who were on their benches were concerned regarding the news in connection with Lehman Brothers announcements that it would file for Chapter 11 bankruptcy and Merrill Lynch agreed to sell itself of Bank of America. As a result trading was very light and highly unstable in stock, bond and currency markets around the region with many investors on holiday.
In Singapore trading dollar knock down harshly opposed to the euro, yen and British pound in currency trading.
On Monday morning, Standard & Poor’s 500 Index gave the most recent sign that American stocks could drop sharply at the opening subsequent to Lehman’s announcement as it plunged 3.7 percent in the morning. Since the interest rate on two-year Treasuries went down by a third of a percent Treasury prices recovered in thin trading.
In recent times investors are confident that the Federal Reserve would cut its interest rates additionally in an effort to help poor American financial institutions and the American economy. This view point gave a significant boost in the Treasuries since January as investors sought the safety of American government debt.
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