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
Stock Market Deviation from Overall Outlook for 2020 - 22nd Feb 20
The Shanghai Composite and Coronavirus: A Revealing Perspective - 22nd Feb 20
Baltic Dry, Copper, Oil, Tech and China Continue Call for Stock Market Crash Soon - 22nd Feb 20
Gold Warning – This is Not a Buying Opportunity - 22nd Feb 20
Is The Technology Sector FANG Stocks Setting Up For A Market Crash? - 22nd Feb 20
Coronavirus China Infection Statistics Analysis, Probability Forecasts 1/2 Million Infected - 21st Feb 20
Is Crude Oil Firmly on the Upswing Now? - 20th Feb 20
What Can Stop the Stocks Bull – Or At Least, Make It Pause? - 20th Feb 20
Trump and Economic News That Drive Gold, Not Just Coronavirus - 20th Feb 20
Coronavirus COVID19 UK Infection Prevention, Boosting Immune Systems, Birmingham, Sheffield - 20th Feb 20
Silver’s Valuable Insights Into the Upcoming PMs Rally - 20th Feb 20
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From - 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

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Dow Jones Three Up Days In A Row!

Stock-Markets / US Stock Markets Nov 26, 2008 - 02:10 PM GMT

By: PaddyPowerTrader

Stock-Markets After the helter skelter of the previous two days of headline-grabbing gains, the stocks markets went about their business in a more sedate manner yesterday. They still finished above water , extending their winning streak to three. Equities were buoyed by Hank and Ben's latest trick, direct intervention into the frozen mortgage markets.

Home Building stocks were the main beneficiaries on the day, this despite another drop in the Case-Shiller home price index. The big loser was the U.S. Dollar as foreign exchange markets aren't too keen on printing presses working overtime i.e. the twin deficits could be heading for a scary 12% of GDP. If gold goes through $850 it will indicate people are losing faith in the Greenback again.

Today's Market Moving Stories

  • Not sure what the collective noun for central bankers is. Yes, I know what it rhymes with. A plethora of ECB council members have been on the wires warming us up for next weeks third cut in this cycle from the ECB. Austrian and Italian members Nowotny and Bini Smagi and the reformed German hawks Axel Weber and Jurgen Stark have all strongly implied in their coded way that another ½% cut is a done deal on Thursday 4th December. Sure, the market wants and needs more but if you are Irish, Santa is a tracker mortgage.
  • German import prices fell a stunning 3.6% month-on-month (MOM). We get German Lander CPI data later this morning with a dramatic drop of –0.5 MOM possible. This should soften the cough of any remaining hawks in the ECB.
  • Bond markets don't believe in this equity rally. There are now 12 million US households with negative equity. Housing still sucks and prices are still in freefall. Meanwhile, we learn that more banks are getting into trouble . And recall a lot of the failures we've had to date are institutions that weren't even of the watch list!
  • Incoming President Obama is set to complete his line up of former heavyweights of a bygone era with the appointment of legendary inflation fighter Paul Volker to head a new economic advisory board.
  • It's not just the retailers on Main St. that are feeling the pinch. Stats overnight from Mastercard show a dramatic falloff in e-commerce spending so far in November, which was down 4% YOY. To put this in context, just six months ago this was growing at 15%. Ebay and Amazon might be in trouble today on the back of this first ever decline in e-commerce sales.
  • The WSJ writes that the record plunge in commercial real estate securities has seen Parkcentral Global Hub, a $1.5bn fund, confirming it has been forced to liquidate to pay creditors. The FT is reporting that four hedge funds face collapse because they cannot access shares and loans held at the London arm of the defunct Lehman Brothers.
  • The UK government is becoming browned off with the banks and may force them to open theirs books to the authorities if they fail to abide by a code of practise to increase their lending. What was once so easy now appears impossible!
  • Toyota had their credit rating docked two notches by Fitch from AAA to AA.
  • Chinalco says it plans to raise its stake in Rio Tinto to at least 14.99% after the marriage of miners with BHP Billiton ended in acrimony.
  • China has just cut lending and deposit rates by a sizable 1.08% (108 basis points). I know, don't ask.

So What Are The Fed And Treasury Hoping To Achieve
The Fed is seeking to reduce the spreads on the value of Freddie and Fannie securities i.e. their cost of raising new funds (which are unusually high at the moment) which should in theory translate into lower mortgage rates for them to pass on. Indeed these onerous spreads tightened by ½% so the move should bring some tangible real economy benefits . The rally in US Treasury bonds should also help some people to refinance .

The Fed has slashed official interest rates and longer term rates on 10 and 30 year U.S. government bond are near record lows. But still, mortgage rates in many instances have actually risen! This is the idea that monetary policy is like pushing on a string. This echoes what I was talking about yesterday with the dramatic rise in the cost of borrowing for even corporates with good credit ratings .

Data Today
We have a very full data calendar in the day ahead to navigate. Firstly in the UK, the preliminary Q3 GDP report will be the main focus.

In the US, highlights include October's durable goods (consensus: -3.0%, -1.6% ex transport) and the Oct PCE numbers. There is downside risk to Chicago PMI (cons: 37.0) and the final University of Michigan Confidence (cons: 57.5).

It will not be unreasonable to expect more wild and whippy ranges ahead of the impending Thanksgiving holiday which will see US markets wind down at around 5pm today.

The American History Museum Reopens

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”.

© 2008 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