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
Dow Short-term Trend Analysis - Coronavirus Trigger a Stocks Bear Market? - 24th Feb 20
Sustained Silver Rally Coming? - 24th Feb 20
Should Investors Worry about Repo Market and Buy Gold? - 24th Feb 20
Are FANG Technology Stocks Setting Up For A Market Crash? - 24th Feb 20
Gold Above $1,600 Amid FOMC Minutes and Coronavirus Impact - 24th Feb 20
CoronaVirus Pandemic Day 76 Trend Forecast Update - Infected 540k, Minus China 1715, Deaths 4920 - 23rd Feb 20 -
Ways to Find Startup Capital - 23rd Feb 20
Stock Market Deviation from Overall Outlook for 2020 - 22nd Feb 20
The Shanghai Composite and Coronavirus: A Revealing Perspective - 22nd Feb 20
Baltic Dry, Copper, Oil, Tech and China Continue Call for Stock Market Crash Soon - 22nd Feb 20
Gold Warning – This is Not a Buying Opportunity - 22nd Feb 20
Is The Technology Sector FANG Stocks Setting Up For A Market Crash? - 22nd Feb 20
Coronavirus China Infection Statistics Analysis, Probability Forecasts 1/2 Million Infected - 21st Feb 20
Is Crude Oil Firmly on the Upswing Now? - 20th Feb 20
What Can Stop the Stocks Bull – Or At Least, Make It Pause? - 20th Feb 20
Trump and Economic News That Drive Gold, Not Just Coronavirus - 20th Feb 20
Coronavirus COVID19 UK Infection Prevention, Boosting Immune Systems, Birmingham, Sheffield - 20th Feb 20
Silver’s Valuable Insights Into the Upcoming PMs Rally - 20th Feb 20
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Taking Profits On The China Stock Market Growth Trade

Stock-Markets / Financial Markets 2009 Jun 04, 2009 - 06:04 AM GMT

By: PaddyPowerTrader

Stock-Markets

Best Financial Markets Analysis ArticleStocks pared losses as the Dow finishes down 64 points yesterday having dipped to minus 142 points earlier as investors and traders took profits on the “China growth play” i.e. there was notable selling of commodity, metals, oil, & mining shares.


So we sit at major resistance levels after a 3 month government induced rally, (with the biggest fiscal stimulus packages and bailouts of all time and free money for banks) waiting on a new white knight or catalyst. Because of the earnings game, the stock market has turned into a “one quarter at a time” game. You might own the best stock in the world with the best long-term outlook, but if they miss and guide down you’re bleeding red. Until earnings ramp up in a few months it’s hard to find a good positive catalyst to cling onto.

Today’s Market Movers

  • Bernanke’s message in the testimony itself was orthodox. He recognises that the rises in rates “appear to reflect concerns about large federal deficits but also other causes, including greater optimism about the economic outlook, a reversal of flight-to-quality flows and technical factors related to the hedging of mortgage holdings.” This suggests confidence that the monetary accommodation can be unwound in time, and that the Fed will not be tempted into monetising debt. But the Chairman could have been still more forceful. He will not have quelled market much.
  • Note that the European Stoxx 600 is now valued at 25.5 times earnings, it’s most expensive level since 2004. Contrast this with a very interesting Bloomberg news story that predicts European companies will reduce dividends over the next 18 months at the fastest rate since at least 1999 and you have reasons to be cautious at these lofty levels.
  • In exploration news Dragon Oil has reported that oil flowed at an initial rate of 3,554 bopd from a new development well on its licence offshore Turkmenistan. This rate is more or less in line with expectations. This is the second of eight development wells planned by Dragon for 2009. Management is targeting an annual average growth rate of 15% in daily production for the period 2009-2011.
  • Meanwhile, UK food retailers Sainsbury and Morrision’s are up this morning after the latter posted a positive sales update and the former was upgraded by Morgan Stanley.
  • Despite the parade of the blondes over the weekend little old Latvia remains mired in a deep depression and couldn’t even sell any bond debt yesterday. Inconsequential you may think, but a devaluation of the lat would weigh heavily on other Central , Baltic and Eastern European countries (particularly Hungary and Romania whose currencies are perceived to be overvalued) and put additional pressure on the banking systems in Sweden and Austria who have large exposures to these countries. With globalization read contagion.

Tullow Steps Up The Search For A Partner
According to media sources, Tullow Oil is looking to sell 50% of its stake in the Ugandan Oil Fields in order to achieve optimum production. Chief Executive of Tullow, Aidan Heavey stated that Tullow was looking at bringing in a partner to fund the pipeline.

He said exploration companies rarely take 100% of any licence or interest and usually bring in partners. For Uganda, Tullow decided to keep full ownership in order to move quickly through the exploration phase. Tullow’s partner in Uganda, Heritage Oil said yesterday that it was in preliminary talks that may lead to a possible merger.

If completed, the deal would be “treated as a reverse takeover.

Bank Of Ireland Gains Strength
Bank of Ireland whose share price has tripled in the last five weeks yesterday announced the completion of its tender offer for four separate securities, paying out a combined €520m for paper with a nominal value of €1.26bn. This will generate a gain of €740m pre-tax. When account is taken of likely gains on two further dollar-denominated securities, the bank is confident of generating an equity gain (i.e. after tax) of €1bn. the bank has more generally benefited from positive sentiment due to better capital levels and margins plus of course the receding threat on nationalization. There is even talk of a rights issue later in the year to repay the government.

Five stocks that have prospered during the great recession

Here is the problem for many mortgage holders and homeowners today

Data Ahead Today

  • Euro area retail sales, Apr (10:00 BST): Sales should continue to shrink, down 0.2% in the month
  • BoE interest rate decision (at Noon): Rates should be left at 0.5% and I do not expect further commitments on asset purchases.
  • The statement might emphasise bank lending and MPC perceptions that credit supply strains are intensifying would be taken as a signal of a further Quantitative Easing extension in subsequent months (up to the initial limit of GBP150b, with increased risk that the BoE asks Treasury to exceed the current cap).
  • ECB interest rate decision (12:45 BST): Rates should remain on hold at 1%, with no decision on a refinancing floor.
  • The Covered Bond purchase programme should amount to EUR60b, probably commencing in the next few weeks, with the door kept open to future increases.
  • The ECB should announce the list of eligible bonds, but there’ll probably be no primary market purchases because they might conflict with the Treaty.
  • New forecasts should include a largely anticipated and significant downward revision for 2009 GDP.

And finally….one for the road


Disclosures = None

By The Mole
PaddyPowerTrader.com

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 http://www.MarketOracle.co.uk - 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