Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19
Central Banks Move To Keep The Global Markets Party Rolling – Part III - 14th Aug 19
You Have to Buy Bonds Even When Interest Rates Are Low - 14th Aug 19
Gold Near Term Risk is Increasing - 14th Aug 19
Installment Loans vs Personal Bank Loans - 14th Aug 19
ROCHE - RHHBY Life Extension Pharma Stocks Investing - 14th Aug 19
Gold Bulls Must Love the Hong Kong Protests - 14th Aug 19
Gold, Markets and Invasive Species - 14th Aug 19
Cannabis Stocks With Millennial Appeal - 14th Aug 19
August 19 (Crazy Ivan) Stock Market Event Only A Few Days Away - 13th Aug 19
This is the real move in gold and silver… it’s going to be multiyear - 13th Aug 19
Global Central Banks Kick Can Down The Road Again - 13th Aug 19
US Dollar Finally the Achillles Heel - 13th Aug 19
Financial Success Formula Failure - 13th Aug 19
How to Test Your Car Alternator with a Multimeter - 13th Aug 19
London Under Attack! Victoria Embankment Gardens Statues and Monuments - 13th Aug 19
More Stock Market Weakness Ahead - 12th Aug 19
Global Central Banks Move To Keep The Party Rolling Onward - 12th Aug 19
All Eyes On Copper - 12th Aug 19
History of Yield Curve Inversions and Gold - 12th Aug 19
Precious Metals Soar on Falling Yields, Currency Turmoil - 12th Aug 19
Why GraphQL? The Benefits Explained - 12th Aug 19
Is the Stock Market Making a V-shaped Recovery? - 11th Aug 19
Precious Metals and Stocks VIX Are About To Pull A “Crazy Ivan” - 11th Aug 19
Social Media Civil War - 11th Aug 19
Gold and the Bond Yield Continuum - 11th Aug 19
Traders: Which Markets Should You Trade? - 11th Aug 19

Market Oracle FREE Newsletter

The No 1 Gold Stock for 2019

Dow Disappoints, Nasdaq Continues Winning Streak

Stock-Markets / Financial Markets 2009 Jul 23, 2009 - 05:30 AM GMT

By: PaddyPowerTrader


Best Financial Markets Analysis ArticleUnderwhelming banking results from Morgan Stanley, Keycorp and Wells Fargo and a decline in energy prices dragged down a jaded looking Dow to a modest 0.39% decline on a listless days trading. But over at the Nasdaq they made it 11 up days in a row, as it continued to bask in the warm afterglow of Apple’s stellar results on strong IPhone and Mac sales. Starbucks surprised on the upside, sending the share price into orbit (up 18%, it’s biggest 1 day gain in 11 years). EBAY also impressed investors, while the less said about Qualcomm the better.

So, it’s still all about “earnings” and not revenues and some 297 more companies report today. One final thought for the day is speculation that M&A deals may be about to rebound with news of Amazon’s $800m to acquire Zappos and Bristol Myers Squib buying biotech company Medarex for $2.4bn.

Today’s Market Moving Stories

  • Overnight, we had news that Japan’s annual export slide slowed in June from May, suggesting that stimulus spending around the world is propping up global demand. Annual declines narrowed for Japan’s exports to China, one of the world’s most vibrant economies, as well as to the United States and Europe, boding well for Japanese auto and electric machinery firms. Still, some economists are lukewarm on the outlook, because once stimulus measures fade, final demand won’t be strong enough to pick up the slack. The 35.7 percent annual fall in the value of exports in June roughly matched economists’ median forecast for a 35.1 percent drop and was smaller than a 40.9 percent decline in May, the Ministry of Finance data showed.
  • Fears over the Latvian crisis re-surfaced yesterday as it emerged that the IMF bailout is far from certain. There seems to be a stand-off between Latvian politicians who don’t want to cut pensions and make other sacrifices that the IMF are demanding from them. Any blowout here would hurt Scandi countries and Central and Eastern European countries also getting hit.
  • The second leg of Bernanke’s testimony was not a large market mover. Bernanke seemed particularly concerned about the commercial real estate outlook, but the market mostly ignored that warning. “As the recession’s gotten worse in the last six months or so, we’re seeing increased vacancy, declining rents, falling prices – and so, more pressure on commercial real estate. We are somewhat concerned about that sector and are paying very close attention to it. We’re taking the steps that we can through the banking system and through the securitization markets to try to address it.”
  • The FT has a story about the US banks’ warnings on commericial property. The Huffington Post also has an angle.

Forever Blowing Bubbles
Reuters reports that “excessive bank lending in China is flowing into the stock and property markets and could inflate asset bubbles”, a Chinese lawmaker and ex-central bank official said in comments published on Thursday. Many independent economists have sounded similar warnings about China’s surging money growth, but Wu Xiaoling, former People’s Bank of China vice governor, is one of the first officials to sound the alarm about bubbles. “Under conditions of overcapacity, excess money supply will not lead to rises in price indexes, but it could generate asset bubbles,” she said at a forum in comments reported by the Chinese-language National Business Daily.

“The money has really gone out and if it is a time when there is no investment in the real economy and no one will put the money in banks to earn interest, then the funds will flow into the property market and stock market,” she said. China’s central bank may have to raise banks’ reserve requirements to mop up excess liquidity, she said, adding that this was simply a tool for managing the money supply and should not be misunderstood as monetary tightening. “If the central bank one day needs to raise reserve requirements, nobody should panic too much,” she said. In the first six months of the year, Chinese banks granted a record 7.37 trillion yuan ($1.08 trillion) in new loans, almost 25 percent of annual GDP and eclipsing a full-year minimum target of 5 trillion yuan. The country’s benchmark stock index has soared some 80 percent this year, making it the best performing major market in the world, and property prices have also started running up in recent months.

Wu said that China faced a dilemma in easing the rate of loan growth. Inflationary pressures would arise if lending continued at the same pace, but without sustained lending, many big projects may wind up unfinished because they are contingent on longer-term financing. She said that new lending in the year would probably reach 10 to 12 trillion yuan, making for an annual increase of 33 to 40 percent in outstanding loans”. Meanwhile, Foreign Minister Yang Jiechi said: “We believe that given the tremendous efforts of the Chinese people and given the good impact of our stimulus package and the mutual support … between China and the international community, we will be able to reach the 8 point growth target for this year.”

The (dis)United States
The Budget deal in California has led to a revolt by the suddenly “disenfranchised” who would suffer under severe Budget cuts. LA County is readying a suit, unions are threatening to strike in response to pay cuts and some Republicans are aghast that 27,000 inmates will be let go to save dough. The WSJ summed it up by saying that California’s Budget mess will prolong the downturn in this most populous US state as spending cuts offset the positive impact of the Federal stimulus. Meanwhile, the FT has highlighted the pressure on California’s two largest pension funds, viz, Calpers and Calstrs. Moody’s has put both AAA-rated entities on review for downgrade. In Detroit, the public school system may tear a page out of GM’s playbook and declare bankruptcy and Jefferson County, AL may put many workers on leave as they teeter near bankruptcy. These issues are another leg of the vast adverse feedback loop and akin to a driver who navigates thick, high-speed traffic while on a cell phone. You know trouble is probably ahead, you just don’t know when or what it will look like.


  • Shares on the move up this European morning included ABB (who make electricity grids). They beat Q2 analysts estimates (how often have I written that this week) after COST cutting though net income was DOWN. Swiss bank Credit Suisse reported this morning a 29% increase in REVENUE on trading. Both stocks are up 3% as is medicines maker Roche, after upping its full year guidance due to synergies from their acquisition of Genentech.
  • Wendelin Wiedeking, Porsche CEO has agreed to leave the board of Porsche, along with the Group’s finance director Holger Haerter. This is no longer a great surprise and had been strongly rumoured over the last week and indicates that VW has won out in the power struggle between the two manufacturers. Porsche also noted that they would look to raise around Euro 5bn in equity before a transaction with VW (presumably an acquisition of Porsche Auto by VW) could go ahead. However, with Porsche already facing an immediate Euro 2Bn tax bill and the re-finance of a hybrid instrument (Euro 640M) much of the proceeds from the issue would go straight out of the Group.
  • Independent News and Media this morning announced the disposal of its 18.07% interest in Cashcade to Partygaming for a total consideration of approx €15.3m. Depending on specified earnings targets being met, IN&M may receive further earn outs in 2010 and 2011. This news follows on from recent speculation that the group had made progress in planned asset sales. This sale is positive as it deleverages IN&M’s balance sheet.
  • The announcement yesterday of Anglo Irish Bank’s tender offer for buyback of debt instruments could yield as much as €2bn profit for the bank if there is full take-up of the offer according to Davy’s – which is a positive for the Irish Exchequer.
  • The song of regarding failure remains the same at the big investment bakes as Morgan Stanley are setting aside a modest $3.9bn (72% of revenue) for bonuses, despite making a LOSS.

Ahead Today

  • UK Retail Sales were released today at 09:30, rising 1.2% against a forecast of 0.4%.
  • In the US, Existing Home Sales figures are released at 15:00. It is expected that sales could show a small improvement to 4.84m.
  • Another hectic day on the earnings front with AT&T, Bristol-Myers Squibb, Ford, MMM, CIT Group, Fifth Third, PNC Financial, UPS, Xerox, Amazon, AmEx, Microsoft, Broadcom and Capital One amongst those reporting.

And Finally…

  • Grab yourself a slice of financial history and bid for some Lehman Brother’s memorabilia!
  • It’s hard enough in these troubled times for a budding entrepreneur to make a few quid, particularly when you shoot yourself in the foot with one of these signs.
  • Cairo Illinois. It looks like a Sufjan Stevens theme album.

The Pyramid Economy

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