Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Corona Virus Wuhan Global Pandemic 2020 Deaths Forecast and Market Consequences - 28th Jan 20
Palladium Surges above $2,400. Is It Sustainable? - 27th Jan 20
THIS ONE THING Will Tell Us When the Bubble Economy Is Bursting… - 27th Jan 20
Stock Market, Gold Black Swan Event Begins - 27th Jan 20
This Will Signal A Massive Gold Stocks Rally - 27th Jan 20
US Presidential Cycle Stock Market Trend Forecast 2020 - 27th Jan 20
Stock Market Correction Review - 26th Jan 20
The Wuhan Wipeout – Could It Happen? - 26th Jan 20
JOHNSON & JOHNSON (JNJ) Big Pharama AI Mega-trend Investing 2020 - 25th Jan 20
Experts See Opportunity in Ratios of Gold to Silver and Platinum - 25th Jan 20
Gold/Silver Ratio, SPX, Yield Curve and a Story to Tell - 25th Jan 20
Germany Starts War on Gold  - 25th Jan 20
Gold Mining Stocks Valuations - 25th Jan 20
Three Upside and One Downside Risk for Gold - 25th Jan 20
A Lesson About Gold – How Bullish Can It Be? - 24th Jan 20
Stock Market January 2018 Repeats in 2020 – Yikes! - 24th Jan 20
Gold Report from the Two Besieged Cities - 24th Jan 20
Stock Market Elliott Waves Trend Forecast 2020 - Video - 24th Jan 20
AMD Multi-cores vs INTEL Turbo Cores - Best Gaming CPUs 2020 - 3900x, 3950x, 9900K, or 9900KS - 24th Jan 20
Choosing the Best Garage Floor Containment Mats - 23rd Jan 20
Understanding the Benefits of Cannabis Tea - 23rd Jan 20
The Next Catalyst for Gold - 23rd Jan 20
5 Cyber-security considerations for 2020 - 23rd Jan 20
Car insurance: what the latest modifications could mean for your premiums - 23rd Jan 20
Junior Gold Mining Stocks Setting Up For Another Rally - 22nd Jan 20
Debt the Only 'Bubble' That Counts, Buy Gold and Silver! - 22nd Jan 20
AMAZON (AMZN) - Primary AI Tech Stock Investing 2020 and Beyond - Video - 21st Jan 20
What Do Fresh U.S. Economic Reports Imply for Gold? - 21st Jan 20
Corporate Earnings Setup Rally To Stock Market Peak - 21st Jan 20
Gold Price Trend Forecast 2020 - Part1 - 21st Jan 20
How to Write a Good Finance College Essay  - 21st Jan 20
Risks to Global Economy is Balanced: Stock Market upside limited short term - 20th Jan 20
How Digital Technology is Changing the Sports Betting Industry - 20th Jan 20
Is CEOs Reputation Management Essential? All You Must Know - 20th Jan 20
APPLE (AAPL) AI Tech Stocks Investing 2020 - 20th Jan 20
FOMO or FOPA or Au? - 20th Jan 20
Stock Market SP500 Kitchin Cycle Review - 20th Jan 20
Why Intel i7-4790k Devils Canyon CPU is STILL GOOD in 2020! - 20th Jan 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Stock Market Rally Fades In Final Minutes

Stock-Markets / Financial Markets 2009 Apr 23, 2009 - 07:33 AM GMT

By: PaddyPowerTrader


Best Financial Markets Analysis ArticleYesterday’s tentative rally was brought to an abrupt end by some broad based late selling in financials and notable weakness in tech bellwether Intel on a report that the European Union was close to sanctioning the chip giant for anti-competitive practices. On the bright side, Apple beat street estimates thanks to healthy iPhone sales, as did eBay. Other stocks that reported yesterday, such as Wells Fargo (who had the “best” quarter ever), Scandisk and Boeing all chalked up hefty gains on the day. Caterpillar faired well on an upgrade from JP Morgan, while to the downside, Morgan Stanley had a big miss versus analysts estimates and cut their dividend by 81%.

Today’s Market Moving Stories

  • Bulls Vs BearsIn a case of “Oh dear Darling”, the UK press has taken a uniformly negative view of yesterday’s budget, focusing on both the hefty borrowing needs and the apparent optimism ingrained in the economic forecasts. It was really an unimaginative holding exercise which put off the hard decisions. A budget for politics, not for economics. The UK’s fiscal position now looks horrible and debt levels are going to soar. Note that the UK’s budget position is now worse than Ireland’s, though I doubt it will prompt the Telegragh to stop the Paddy bashing.
  • The Ricardian equivalence theory is about to face its biggest test ever at the global level. The consumer knows all too well that fiscal trends are unsustainable, and, facing higher taxes and lower social spending in the future, will tend to save more, even more so in countries like the UK and the US where household debt has exploded over the past decade. That will offset the positive impact of aggressive stimuli. Again, I fear that the slowdown in the pace of economic deterioration will not be followed by the usual positive turnaround. As growth stays well below potential, the global output gap will widen further, making the deflation threat ever more serious.
  • The Chinese economy has bottomed out and could grow as much as 8% this year according to an independent member of the PBOC board. Another member said that the current interest rate setting was appropriate, but that there was room to cut further if warranted.
  • Reuters reports that Germany’s leading economic research institutes recommend that the ECB should cut rates further to 0.5% given the Eurozone’s low inflation and the depth of the economic collapse. “Even a rate of zero would not be an adequate reaction to the crisis.”
  • “From crisis to catastrophe” is the headline of this morning’s lead in Financial Times Deutschland, after it emerged that Germany’s economics institutes are forecasting a fall in economic growth of 6% for this year. The mood in Berlin has changed markedly over the last few days, reinforced by a deeply depressing “summit” of business leaders with Angela Merkel, who at least now acknowledges that there is a crisis out there.
  • An Associated Press story said the US bank stress tests are designed to favour the larger Wall Street banks, while potentially threatening regional banks (some tests are due to be released by the Treasury from Friday onwards). That failed to impact risk sentiment.

BailoutFurther Downgrades From The IMF
More glum tidings from the IMF’s World Economic Outlook. It pulls no punches. A day after the release of the excellent Global Financial Stability Report, the IMF produced its economic projections, which make equally grim reading. The world economy has entered a fully synchronised recession, and is forecast to contract by 1.3% this year, another downward revision, to be followed by a sluggish resumption of growth in 2010. The reason for the latest downward revision is the greater than expected persistence of financial problems, which are not going to disappear soon even if policy makers did all the right things (which they are not). The risks of the forecast are once more on the downside, which makes further downward revision likely. Again, it is best to read the report itself, rather than rely on sketchy news reports. The report is predictably very critical of the haphazard and uncoordinated policy response in Europe.


  • In sunrise European equity news, banks are unsurprisingly under a bit of selling pressure following the late sell-off in financials Stateside. Credit Suisse is bucking the trend after posting better than expected numbers.
  • Japanese heavyweight Nomura was sold off overnight on a rumour that they will post a $7bn loss on Friday.
  • The worlds largest paint maker Akzo Nobel posted an unexpected Q1 loss on a big slide in demand from Asia.
  • GM said it was likely to miss a debt payment deadline, raising the brinkmanship one more level. But the news made barely a ripple.
  • AIB’s Polish sub Bank Zachondi saw its share price close up 7% yesterday. Local commentators appear to be suggesting that a sale could provide a significant boost to the share price as a result of its attraction to potentially interested parties. “Some people seem to be betting that a new, stronger owner may appear in the bank, which is pushing the stock price higher.” That local analyst works for Deutsche Bank, one of the most likely banks to be interested in the Bank Zachondi stake.
  • A number of commentators are beginning to focus on the challenges facing Irish agri-food companies in the wake of the big news from Tesco this week. First, they now account for 30.4% of the UK grocery trade and, along with three others (Asda, Sainsbury and Morrisons), takes almost three of every four pounds spent on food in British supermarkets. Second, Tesco announced plans to centralise purchasing for Ireland and the UK instead of having separate structures. Forthwith, food suppliers will have to face off with Tesco’s might across both economies. For Irish producers the lesson is clear: without scale, the ability for future sustainable profits will be seriously compromised.

Data And Earnings Today
Economic indicators are light on the ground today. In the morning, we get PMIs from the Eurozone members and in the afternoon we have initial jobless claims and homes sales data from the US.

Earnings highlights today come from Conoco-Phillips (expected EPS $0.43), Marriott ($0.14), Union Pacific ($0.66), US Air ($-2.38), Microsoft ($0.30), Amazon ($0.31), American Express ($0.12), UPS ($0.66), Philip Morris ($0.69) and Burlington Northern ($0.96).

Probably Not What The Government Had In Mind With Its Bike-To-Work Scheme

And Finally… US Treasury Department Issues Emergency Recall Of All US Dollars

Disclosures = None

By The Mole

The Mole is a man in the know. I don’t trade for a living, but instead work for a well-known Irish institution, heading a desk that regularly trades over €100 million a day. I aim to provide top quality, up-to-date and relevant market news and data, so that traders can make more informed decisions”.

© 2009 Copyright PaddyPowerTrader - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

PaddyPowerTrader Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules