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 Selling on the Bernanke News

Stock-Markets / Financial Markets 2009 Aug 26, 2009 - 02:57 AM GMT

By: PaddyPowerTrader

Stock-Markets

Best Financial Markets Analysis ArticleStateside Bernanke gets an encore, the Case-Shiller shows house prices were up MoM, consumer confidence soared 6.7 points through the 50 level and yet stocks finished only marginally ahead. Is the fat lady about to sing on the overbought summer rally? Maybe it will be called the Bernanke top in years to come?


This side of the pond in the UK the BBA reported that mortgage approvals rose in July to the highest level since February 2008. Meanwhile, the German GDP report was pleasing in as much as it confirmed the 0.3% QoQ increase in output with domestic demand proving stronger than expected, boding well for activity in the second half of this year. Later in the session the Belgian business confidence index rose slightly more than the market had expected to its higher level since last October.

Overnight News

  • Asian stocks edged higher this morning, with thin summer trading volumes keeping prices choppy and centred on short-term chart targets. Japan’s Nikkei share average drifted up 0.6%, within reach of a 10-month high reached earlier in August.
  • Japanese exports in July fell 1.3% MoM and 36.5% YoY. This compares to forecasts of a 38.6% YoY decline. Overall exports to China fell 26.5% YoY while exports to the United States fell 39.5% YoY.
  • The WSJ quotes estimates that hedge funds managing close to $15bn have moved to Switzerland in the past year (with more possibly to come) in order to avoid the rise in the top personal tax rate to 51% and concerns over tighter European Union regulations. The paper also reports that the Swiss cantons of Zug and Zurich plan UK shows designed to lure businesses from London.
  • Ba Shusong, a deputy director of the Chinese Development Research Centre (a think tank under the State Council) says that economic growth may exceed 10% in the first quarter of next year, with monetary policy likely to remain loose in the near term to support the economic recovery.
  • The Federal Reserve must for the first time identify the companies in its emergency lending programs after losing a Freedom of Information Act lawsuit.
  • The White House new pro jections suggest that the budget deficit would be $2,000bn higher over the next 10 years than it had earlier predicted.
  • The US ABC consumer comfort improved 1 point to -45 points, a 14-week high.
  • Toyota rose 1.5% on a report that the carmaker would cut global production capacity and post an operating profit in the 2010 financial year. However, while news of the output cut shored up the stock, it also reinforced worries about persistent weakness in global consumer demand, which is key to a solid recovery. A source also said that it is mulling halting a production line at its UK plant.
  • It gets even more ridiculous. MSNBC’s “Morning Meeting” invited Larry Levine of “Wall St. Prison Consultants” on the show to offer advice to Madoff on what he can expect in prison.

Does The Fall In Chinese Markets Signal A Slide Around The World?
Recent volatility in Chinese shares has been keeping investors guessing. The Shanghai composite index is down 14% so far in August, on track for the biggest monthly decline since the darkest month of the financial crisis in October 2008. The precipitous move triggered questions on whether other high flying equity markets were due for a correction. However, to what extent a decline in the Chinese market, which is largely closed to foreign investors, matters for global market trends and perceptions of risk is an open question.

Gains in Asian stock markets have been limited due to continued uncertainty over the direction of China’s stock market. For the moment, Beijing seems content to use rhetoric and jaw boning to tone down the pace of asset price appreciation, rather than by actually altering monetary policy. With clarity on policy action likely to be cloudy in the near term, I believe that markets may also endure an especially volatile period, even if there is no real consolidation. The longer term question to answer is whether markets can endure a scenario where China tightens independently.

Do you remember when it was said that China was the key. They were the beacon of sentiment and if that prop gave way, the whole house of cards would come tumbling down. Now all of a sudden, they don’t seem to matter. Why is that? No idea. But did you hear Premier Wen Jiabao yesterday? Man is he bearish or what? According to the man who should know there is still great pressure on exports, the impact of short-term policies were weakening, and the economy faces many new difficulties. Okay, and guess what China is doing? They are tightening policy. Some are in denial on this, but when two large banks say they are only going to lend 25% of what they did in the first half, that is tightening.

Earnings This Morning
Lots of companies reporting this morning – a bit of a mixed bag thus far.

Irish Life & Permanent released results at the lower end of expectations due to a high impairment charge on the banking division, and negative variances in the Life side. The group sees operating results same for H2 as H1, and comments that restructuring vote is to happen in H2. With all attention focused on the de-merger, these results do not detract from the breakup argument.

Food group Glanbia’s interim results show a 21.5% decline in EPS as commodity market weakness ate into profitability. However big picture they can justifiably claim to have delivered a reasonable first-half result given the impact that global dairy markets had on its Irish dairy ingredient activity with consumer Foods Ireland performed well in a very challenging environment.

Advertising giant WPP H1 results were substantially weaker than prior with headline operating profits down 25% including the impact of the TNS acquisition which occurred in the second half of 2008. Headline operating profits were £342M vs. a £419M expectation with margins squeezed by increased labour costs

Heineken released Q2 results this morning that beat consensus expectations as higher prices and cost savings helped to offset the anticipated decline in volumes. Reported sales of €7.1bn were up by 11%, driven entirely by first time consolidations, as organic sales were marginally down (prices +6.2%; volumes -6.6%).

Data Ahead Today
This week’s European highlight is the IFO index at 09:00 and it looks as though it will grow sharply. There is a 97% correlation between the German PMI manufacturing index and the IFO and so it could be claimed that the improvement in the IFO is mostly in the price following the PMI’s rise from 45.7 to 49.0. That said, I think that Eurozone bond prices are rather elevated and have not really responded to the better economic data, nor the improvement in equity markets.

In the US, Durable Goods Orders for July will be released at 13:30. Look for overall durable goods orders to have jumped by 3.5%, with core durable goods orders likely to have advanced by around 1%.

At 15:00, New Home Sales may have slipped in July, perhaps to around 375,000.

And Finally… The Man Of The Moment And His Top 10 Failures

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