Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20
Does the Stock Market Really "See" the Future? - 12th Sept 20
Basel III and Gold, Silver and Platinum - 12th Sept 20
Tech Stocks FANG Index Nearing Critical Support – Could Breakout At Any Moment - 12th Sept 20
The Tech Stocks Quantum AI EXPLOSION is Coming! - 12th Sept 20
AMD Zen 3 Ryzen 4000 Questions Answered on Cores, Prices, Benchmarks and Threadripper Launch - 12th Sept 20
The Inflation Mega-trend is Going Hyper! - 11th Sep 20
Gold / Silver Ratio: Slowly I Toined… - 11th Sep 20
Stock Market Correction or Reversal? The Jury Isn't Out! - 11th Sep 20
Crude Oil – The Bearish Outlook Remains - 11th Sep 20
Crude Oil Breaks Lower – Sparking Fears Of Another Sub $30 Price Collapse - 11th Sep 20
Inflation by Fiat - 10th Sep 20
Unemployment Rate Drops. Will It Drag Gold Down? - 10th Sep 20
How Does The Global Economy Recover After This Global Pandemic? - 10th Sep 20
The Best Mobile Casino - 10th Sep 20
QE4EVER! - 9th Sep 20
AMD Ryzen Zen 3 4800x 10 Core 5ghz CPU, Cinebench Benchmark Scores (Est.) - 9th Sep 20
Stock Traders’ Dreams Come True – Big Technical Price Swings Pending on SP500 - 9th Sep 20
Should You Be Concerned About The Stock Market Big Downside Rotation? - 9th Sep 20
Options Traders Keep "Opting" for Even Higher Stock Market Prices - 8th Sep 20
Gold Stocks in Correction Mode - 8th Sep 20
The law of long-term time preference and Gold ownership - 8th Sep 20
Gold Bull Markets: History and Prospects Ahead - 8th Sep 20
Sheffield City Centre Coronavirus Shopping Opera Ahead of Second Covid-19 Peak - 8th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Stock Markets End Flat After Up Down Battle

Stock-Markets / Financial Markets 2009 Jun 18, 2009 - 04:31 AM GMT

By: PaddyPowerTrader

Stock-Markets

Best Financial Markets Analysis ArticleMarkets played a game of ping pong yesterday before finishing broadly flat. News from bellwether stock FedEx cast an early pall. Analysts were expecting revenue of $8.32bn this quarter but they reported only $7.85bn. Freight was down 28%, as producers can’t ship if producers aren’t ordering. Another green shoot gets snipped. Note also the lower than expected inflation numbers and the fall in mortgage applications (down 15.8%).


Techs had a better day, rallying on positive comments from Cisco’s John Chambers. But financials again weighed after Standard and Poor’s belatedly downgraded credit ratings of 22 US banks offsetting the news of the $68bn in TARP repayments and continuing worries about future heavy handed Federal regulatory oversight. Triple witching day (options expiry) is due Friday afternoon so, to be frank, the market could be very choppy ahead of this.

Today’s Market Moving Stories

  • The World Bank, in its quarterly update, raised its forecast for 2009 Chinese GDP growth to 7.2% from 6.5% previously. The bank welcomed an unfolding surge in government-influenced investment although noted: “it is unlikely to lead to a rapid, broad-based recovery… given the current global environment and the subdued short-term prospects for market-based investment”. It reports that this may occur early next month.
  • Japan’s Tankan’s main diffusion index for manufacturers improved 19 points in April to -50, an improvement from the record low of -78 in March. For non-manufacturers, the index rose to -31 from the previous low of -44.
  • Citing analysts from the Japanese defence ministry, the Yomiuri newspaper reports that North Korea may launch a long range missile that passes over Japan’s Aomori prefecture.
  • Mervyn King gave a sceptical assessment of the state of regulatory and supervisory reforms. King said it is important to prevent too-large-to-fail institutions, or force them to divest, but he said warnings such as these were habitually ignored. King also said it was too early to reverse extraordinary policy stimulus, but not too early to prepare the exit strategies. He reiterated the recovery could be protracted, while Darling opposed Brown’s calls for higher social spending. However, the bond market’s best friend, Blanchflower writes a typically downbeat article in the Telegraph.
  • The British Chambers of Commerce forecasts a contraction of 3.8% in UK GDP this year and see only a muted recovery in 2010. The group notes that the worst of the recession is probably over and output would likely turn positive in the fourth quarter of this year, although “recovery was not guaranteed”.
  • Robert Shiller has an interesting comment on house prices in his latest Project Syndicate column. “There is a lot of misunderstanding about home prices. Many people all over the world seem to have thought that since we are running out of land in a rapidly growing world economy, the prices of houses and apartments should increase at huge rates.” He says this is wrong. There is no shortage anywhere, and the sobering truth is that the crisis was substantially caused by speculators who misunderstood the factors causing the price increases.
  • Comments from Irish PM Brian Cowen yesterday that the Dail vote on NAMA could be in September gave investors an excuse to engage in some profit-taking on Irish bank shares after a phenomenal run up. The market was previously working off the assumption that the vote would take place in July. This slippage in the proposed timetable is unhelpful as it delays the possible badly needed rights issues and introduces some element of political risk as the governments majority has recently been shaved by the loss of two by-elections.
  • Stock in the news today. Cadbury shares are up after reaffirming its full year guidance. Xstrata are also up after broker upgrades from both Citigroup and Morgan Stanley (the stock was down 10% yesterday). Rio Tinto is under the kosh though after news that is plans a share sale to raise $15.2 billion via a discounted rights issue. Don’t you just hate being diluted.
  • These guys personally are the US’s fourth largest creditor.
  • And it’s good to know that all that stimulus money is being spent wisely. Not! Senator Coburn of Oklahoma produced a report about wasteful stimulus projects.

Chinese Whispers
For those of you fully signed up to the China reflation trade, look away now. It is not to say that the fiscal stimulus has not had a beneficial effect on Chinese activity this year. But Societe Generale’s proto bear Albert Edwards takes up the baton this week. What he and some other far sighted commentators question is the quaint notion the markets now seem to have that the Chinese economy can grow at a respectable rate when the rest of the world is in a deep recession. Whenever you look at Chinese statistics, you say is it incompetence, is it confusion, is it conspiracy? My own view is that to the extent that the renewed surge in commodities and the Metals and Mining sectors are based on the Chinese growth miracle, the markets are relying on a combination of hype, lies and wishful thinking. Just over a decade on from the World Bank publishing “Thailand’s Macroeconomic Miracle: Stable Adjustment and Sustained Growth”, that economy’s performance can be best described as unspectacular with an increasingly unstable and dangerous political backdrop. Personally I believe the bullish group take on China is just as vulnerable to massive disappointment as any other extreme of bubble nonsense I have seen over the last two decades.

Yet few dare to point out that the emperor’s clothes might be absent. When, for example, the International Energy Agency had the temerity, a few weeks back, to suggest that the Chinese authorities were inflating the data, they were met with a robust broadside from the Chinese National Bureau of Statistics (NBS). The NBS said on its website “it is regrettable that the point of view in the original article is groundless… We believe that, for an international organization, this approach lacks seriousness”. I think this is a case of me thinks thou doth protest too much.

Oil Technicals Suggest Recent Rally Is Stalling
The chart below shows that the recent gains in oil may be difficult to sustain. We’re approaching good medium term resistance and the 38.2% Fibonacci retracement of the July 2008 - Dec 2008 selloff at 76.28 with decent psychological resistance just ahead of there at 75.00. Recent new highs on oil have not been matched by RSI or momentum which has been travelling in the opposite direction. Initial target would be the 3rd of June low at 64.95 with below there opening up a look at the 55 day and 200 day moving averages, currently at 57.98 and 58.70. Comments in the last two days from mining giants Rio Tinto and BHP Billiton are not very supportive of further gains in commodities with both warning on the strength of demand and BHP Billiton CEO Markus Kloppers stating that he thinks that the Chinese restocking process has already run its course.

Data Ahead Today
At 09:30 May’s UK retail sales are out. I think that sales volumes will rise by a less-than-consensus 0.2%, with a risk of a flat-to-down result after the higher-than-expected inflation data. Note this series is notoriously unreliable and I seriously question the data collection and methodology. At the same time, UK public finances for May is released and there should be another massive deficit with the PSNB reaching £20bn, slightly more than consensus.

In the US at 13:30, weekly jobless claims should fall below the 600K mark for the first time since January. Also at 13:30 we have the US Philadelphia Fed index for June, which should be improving -17, and May’s US leading index, which should be up to 1.1%, driven by ISM vendor performance, the yield curve, stock prices, real money supply and consumer expectations.

After the close tonight we get results from Blackberry maker Research in Motion (expected EPS $0.94).

And Finally… General Motors Commercial Spoof

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