Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
US Treasury Bonds Pause Near Resistance Before The Next Rally - 18th Oct 19
The Biggest Housing Boom in US History Has Just Begun - 18th Oct 19
British Pound Brexit Chaos GBP Trend Forecast - 18th Oct 19
Stocks Don’t Care About Trump Impeachment - 17th Oct 19
Currencies Show A Shift to Safety And Maturity – What Does It Mean? - 17th Oct 19
Stock Market Future Projected Cycles - 17th Oct 19
Weekly SPX & Gold Price Cycle Report - 17th Oct 19
What Makes United Markets Capital Different From Other Online Brokers? - 17th Oct 19
Stock Market Dow Long-term Trend Analysis - 16th Oct 19
This Is Not a Money Printing Press - 16th Oct 19
Online Casino Operator LeoVegas is Optimistic about the Future - 16th Oct 19
Stock Market Dow Elliott Wave Analysis Forecast - Video - 16th Oct 19
$100 Silver Has Come And Gone - 16th Oct 19
Stock Market Roll Over Risk to New highs in S&P 500 - 16th Oct 19
10 Best Trading Schools and Courses for Students - 16th Oct 19
Dow Stock Market Short-term Trend Analysis - 15th Oct 19
The Many Aligning Signals in Gold - 15th Oct 19
Market Action Suggests Downside in Precious Metals - 15th Oct 19
US Major Stock Market Indexes Retest Critical Price Channel Resistance - 15th Oct 19
“Baghad Jerome” Powell Denies the Fed Is Using Financial Crisis Tools - 15th Oct 19
British Pound GBP Trend Analysis - 14th Oct 19
A Guide to Financing Your Next Car - 14th Oct 19
America's Ruling Class - Underestimating Them & Overestimating Us - 14th Oct 19
Stock Market Range Bound - 14th Oct 19
Gold, Silver Bonds - Inflation in the Offing? - 14th Oct 19
East-West Trade War: Never Take a Knife to a Gunfight - 14th Oct 19
Consider Precious Metals for Insurance First, Profit Second... - 14th Oct 19
Stock Market Dow Elliott Wave Analysis Forecast - 13th Oct 19
The Most Successful IPOs Have This One Thing in Common - 13th Oct 19
Precious Metals & Stock Market VIX Are Set To Launch Dramatically Higher - 13th Oct 19
Discovery Sport EGR Valve Gasket Problems - Land Rover Dealer Fix - 13th Oct 19
Stock Market US Presidential Cycle - Video - 12th Oct 19
Social Security Is Screwing Millennials - 12th Oct 19
Gold Gifts Traders With Another Rotation Below $1500 - 12th Oct 19
US Dollar Index Trend Analysis - 11th Oct 19
China Golden Week Sales Exceed Expectations - 11th Oct 19
Stock Market Short-term Consolidation Does Not change Secular Bullish Trend - 11th Oct 19
The Allure of Upswings in Silver Mining Stocks - 11th Oct 19
US Housing Market 2018-2019 and 2006-2007: Similarities & Differences - 11th Oct 19
Now Is the Time to Load Up on 5G Stocks - 11th Oct 19
Why the Law Can’t Protect Your Money - 11th Oct 19
Will Miami be the First U.S. Real Estate Bubble to Burst? - 11th Oct 19
How Online Casinos Maximise Profits - 11th Oct 19
3 Tips for Picking Junior Gold Stocks - 10th Oct 19
How Does Inflation Affect Exchange Rates? - 10th Oct 19
This Is the Best Time to Load Up on These 3 Value Stocks - 10th Oct 19
What Makes this Gold Market Rally Different From All Others - 10th Oct 19
Stock Market US Presidential Cycle - 9th Oct 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast Oct - Dec 2019 by Nadeem Walayat

Credit Crunch To Spill Over The World

Stock-Markets / Credit Crisis 2008 Apr 07, 2008 - 01:22 PM GMT

By: Regent_Markets

Stock-Markets Despite slew of negative headlines, stock markets around the world still managed to close the week up around 4%. The FTSE and CAC managed 4.7% and 5.4% gains while the Nasdaq 100 was the pick of the US markets, closing the week up 5.2%. The rally was sparked by Lehman Brothers announcing the sale billion of dollars worth of shares late on Monday night.


European financials, such as Deutsche Bank and Barclays led, the bullish charge from the start, ironically helped by the news that UBS would write
down CHF 19 Billion. Despite the large sums mentioned, many have interpreted the write down as a sign that the worst of the banking crisis is over. Credit
markets marked down the risk of default from UBS after being impressed with the bank's capital raising efforts. The fact that Lehman's share sale was
significantly over subscribed certainly helped push things higher

However, markets encountered stiffer headwinds for the rest of the week as more bad news continued to flow around the credit crunch. The Bank Of England
Credit Conditions Survey warned that unsecured credit availability is expected to fall somewhat further, and secured credit availability fall even
more. Central bankers may have calmed the credit crunch at its source, but the length and depth of the aftershocks are now the biggest danger to
domestic economies. With mortgage companies pulling deals almost daily, it may simply be a matter of time before consumers crack.

Ben Bernanke may have subdued the credit crisis (for now) with his dramatic interventions, but the possibility of the crunch spilling over the wider economy remains. He commented that much depends on the rate of decline in US housing values from this point onwards. It is arguable that the same could be said of the wobbling UK and European housing markets. For now though, markets are encouraged by the Feds comments that the US economy will strengthen in the second half of 2008, and grow at or above trend in 2009.

The much-anticipated US payroll report came in not only lower than last  month, but even below consensus estimates. This is the third month in a row that the payroll report has not only shown a decline, but has been weaker   than consensus estimates. The only other time this happened was spring 2001, which retrospectively, marked the beginning of the last brief US recession  You might expect global equity markets to fall heavily on the news, but they in fact managed to hold to all or most of their gains for the week.

This could be an indicator that bad news is being priced into stock markets  at the moment. Central bankers and politicians on both sides of the Atlantic
are doing their best to positive in the face of the stream of dismal  economic figures, but traders don't seem fooled. It appears they may already  be pricing in a recession in the US and at least a severe contraction in the  UK.

This week starts off slowly but quickly builds momentum. With no top line announcements on Monday, Tuesday's release of the last FOMC meeting minutes,
will throw markets from any slumber they may be experiencing prior to this. The general consensus is that US rates have further to go, but an influential
Washington think tank has caused many to question the depth of these cuts, saying that the Fed is unlikely to cut below 2%. On Wednesday UK industrial
production figures will be released in the morning.

The week reaches a crescendo on Thursday with the release of six top tier economic announcements. First up are UK and European interest rate decisions.
A Quarter point cut is ‘odds on' for the MPC according to some analysts. Still, the ECB is expected to hold their ‘inflation fighting' stance, and
keep rates the same. The ECB president will speak following the release of their decision. At the same time, we receive US Trade balance figures, and US
unemployment claims. It will be one hectic lunchtime for European traders. To top off an already packed day, Fed chairman Bernanke is due to speak later in
the afternoon.

With a slow start to the week on the economic news front, Traders at BetOnMarkets.com foresee that there's a reasonable chance that last week's
momentum could spill over to the start of this week. A One Touch trade predicting that the Nasdaq Composite Index will touch 2395 at any time during
the next 10 days could yield 15%.

By Mike Wright
Tel: +448003762737
Email: editor@my.regentmarkets.com
Url: Betonmarkets.com & Betonmarkets.co.uk

About Regent Markets Group:   Regent Markets is the world's leading fixed odds financial trading group. Through its main multi-awarding winning websites, BetOnMarkets.com and BetOnMarkets.co.uk, it has established itself as the leading global provider of a unique, powerful way to trade the world's major financial markets. The number, length and variety of trades available to our clients exists nowhere else in the world.   editor@my.regentmarkets.com Tel  (+44) 08000 326 279

Disclaimer: The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Do your own due diligence.

Regent Markets 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