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
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
The Growing Weaponization of Space - 14th Feb 20
Will the 2020s Be Good or Bad for the Gold Market? - 14th Feb 20
Predictive Modeling Suggests Gold Price Will Break Above $1650 Within 15~30 Days - 14th Feb 20
UK Coronavirus COVID-19 Infections and Deaths Trend Forecast 2020 - 14th Feb 20
Coronavirus, Powell and Gold - 14th Feb 20
How the Corona Virus is Affecting Global Stock Markets - 14th Feb 20
British Pound GBP Trend and Elliott Wave Analysis - 13th Feb 20
Owning and Driving a Land Rover Discovery Sport in 2020 - 2 YEAR Review - 13th Feb 20
Shipping Rates Plunge, Commodities and Stocks May Follow - 13th Feb 20
Powell says Fed will aggressively use QE to fight next recession - 13th Feb 20
PALLADIUM - THIS Is What a Run on the Bank for Precious Metals Looks Like… - 13th Feb 20
Bitcoin: "Is it too late to get in?" Get Answers Now - 13th Feb 20
China Coronavirus Infections Soar by 1/3rd to 60,000, Deaths Jump to 1,367 - 13th Feb 20
Crude Oil Price Action – Like a Coiled Spring Already? - 13th Feb 20
China Under Reporting Coronavirus COVID-19 Infections, Africa and South America Hidden Outbreaks - 12th Feb 20
Will USD X Decline About to Trigger Precious Metals Rally - 12th Feb 20
Copper Market is a Coiled Spring - 12th Feb 20
Dow Theory Stock Market Warning from the Utilities Index - 12th Feb 20
How to Get Virgin Media Engineers to FIX Hub 3.0 Problems and NOT BS Customers - 12th Feb 20
China Under Reporting Coronavirus COVID-19 Infections by 66% Due to Capacity Constraints - 12th Feb 20
Is Coronavirus the Black Swan That Takes Gold To-Da-Moon? - 12th Feb 20
Stock Market 2020 – A Close Look At What To Expect - 12th Feb 20
IBM AI Mega-trend Tech Stocks Investing 2020 - 11th Feb 20
The US Dollar’s Subtle Message for Gold - 11th Feb 20
What All To Do Before Opening A Bank Account For Your Business - 11th Feb 20
How and When to Enter Day Trades & Swing Trade For Maximum Gains - 11th Feb 20
The Great Stock Market Dichotomy - 11th Feb 20
Stock Market Sector Rotation Should Peak Within 60+ Days – Part II - 11th Feb 20
CoronaVirus Pandemic Stocks Bear Market Risk 2020? - Video - 11th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Credit Crisis Worst is Over- We'll Believe It When We See It!

Stock-Markets / Global Stock Markets May 05, 2008 - 11:21 AM GMT

By: Regent_Markets

Stock-Markets "Sell in May" says the old stock market adage, but the bulls were in no mood for old wives' tales last week. Markets were in rally mode after the better than expected US jobs report, and news of more liquidity injections from the Federal Reserve. The Federal Reserve did what most traders were expecting them to do in cutting rates another quarter percent down to 2%.


"The worst is behind us" rhetoric continues to flow from central bankers on both sides of the Atlantic. Markets held the previous week's gains to close the week higher for the third week in a row. The FTSE rose 2%, but the biggest gainers were tech stocks with the Nasdaq 100 putting on 3% for the week. Volume has been healthy and the twin inflation evils of Gold and Oil are continuing to deflate from their highs. Oil dropped down to near $110 at one stage, but recovered to finish the week down around $3.00 a barrel. Gold faired the worst of the pair, closing at its lowest levels for 2008, just above $850.

It wasn't plain sailing for all of last week. Banks again gyrated as Mervyn King’s testimony before The Treasury Select Committee, provided a steady flow of warnings about the UK economy. Any home owner hoping for a return to attractive rates of recent years will be disappointed after King made it clear that the Bank of England’s recent liquidity plan wasn't aimed at kick starting British Mortgage lending. With UK house prices showing their first year on year decline for decades, and US house prices down 12% by the same measure, it is only going to get worse for house building stocks. UK home builders such as Persimmon and Barratt Homes stemmed the flow last week with small losses, but they may have much further to go if the US housing stocks and dramatic house price collapse are anything to go by. Indeed last week more data was released supporting anecdotal evidence that the housing slump
has indeed started.

After the deluge of data that hit last week, the forthcoming week is at least reduced in its intensity. The stand out announcements come on Thursday from a European perspective with the Bank of England announcing their latest interest rate decision. Analysts are expecting the MPC to keep rates on hold as they balance the tricky terrors of inflation and an economic slow down. The ECB are also holding a press conference an hour and a half after the MPC announcement.

If we take a step back from the euphoria, there is certainly room to question the bullish case from here. The jobs numbers were not as bad as expected, but the figures still make for grim reading. Private payrolls have fallen for five straight months, and weakness in the goods producing sector is intensifying. The overall trend of an increasing weakness in US job creation remains.

The VIX Options Volatility Index, a good measure of market fear and complacency, now stands at levels not seen since late December 2007, around the time that the Dow Jones fell nearly 2000 points in less than a month. While another 2000 point drop may not be in the offing, there are growing indications of complacency in this rally.

One rather speculative trade may be to place a one touch bet that the S&P 500 will touch 1350 in the next 16 days at BetOnMarkets.com. This trade could return 160% if markets pull back significantly from their current levels.

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