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
UK Coronavirus Infections and Deaths Projections Trend Forecast - Video - 28th Mar 20
The Great Coronavirus Depression - Things Are Going to Change. Here’s What We Should Do - 28th Mar 20
One of the Biggest Stock Market Short Covering Rallies in History May Be Imminent - 28th Mar 20
The Fed, the Coronavirus and Investing - 28th Mar 20
Women’s Fashion Trends in the UK this 2020 - 28th Mar 20
The Last Minsky Financial Snowflake Has Fallen – What Now? - 28th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast Into End April 2020 - 28th Mar 20
DJIA Coronavirus Stock Market Technical Trend Analysis - 27th Mar 20
US and UK Case Fatality Rate Forecast for End April 2020 - 27th Mar 20
US Stock Market Upswing Meets Employment Data - 27th Mar 20
Will the Fed Going Nuclear Help the Economy and Gold? - 27th Mar 20
What you need to know about the impact of inflation - 27th Mar 20
CoronaVirus Herd Immunity, Flattening the Curve and Case Fatality Rate Analysis - 27th Mar 20
NHS Hospitals Before Coronavirus Tsunami Hits (Sheffield), STAY INDOORS FINAL WARNING! - 27th Mar 20
CoronaVirus Curve, Stock Market Crash, and Mortgage Massacre - 27th Mar 20
Finding an Expert Car Accident Lawyer - 27th Mar 20
We Are Facing a Depression, Not a Recession - 26th Mar 20
US Housing Real Estate Market Concern - 26th Mar 20
Covid-19 Pandemic Affecting Bitcoin - 26th Mar 20
Italy Coronavirus Case Fataility Rate and Infections Trend Analysis - 26th Mar 20
Why Is Online Gambling Becoming More Popular? - 26th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock Markets CRASH! - 26th Mar 20
CoronaVirus Herd Immunity and Flattening the Curve - 25th Mar 20
Coronavirus Lesson #1 for Investors: Beware Predictions of Stock Market Bottoms - 25th Mar 20
CoronaVirus Stock Market Trend Implications - 25th Mar 20
Pandemonium in Precious Metals Market as Fear Gives Way to Command Economy - 25th Mar 20
Pandemics and Gold - 25th Mar 20
UK Coronavirus Hotspots - Cities with Highest Risks of Getting Infected - 25th Mar 20
WARNING US Coronavirus Infections and Deaths Going Ballistic! - 24th Mar 20
Coronavirus Crisis - Weeks Where Decades Happen - 24th Mar 20
Industry Trends: Online Casinos & Online Slots Game Market Analysis - 24th Mar 20
Five Amazingly High-Tech Products Just on the Market that You Should Check Out - 24th Mar 20
UK Coronavirus WARNING - Infections Trend Trajectory Worse than Italy - 24th Mar 20
Rick Rule: 'A Different Phrase for Stocks Bear Market Is Sale' - 24th Mar 20
Stock Market Minor Cycle Bounce - 24th Mar 20
Gold’s century - While stocks dominated headlines, gold quietly performed - 24th Mar 20
Big Tech Is Now On The Offensive Against The Coronavirus - 24th Mar 20
Socialism at Its Finest after Fed’s Bazooka Fails - 24th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock and Financial Markets CRASH! - 23rd Mar 20
Will Trump’s Free Cash Help the Economy and Gold Market? - 23rd Mar 20
Coronavirus Clarifies Priorities - 23rd Mar 20
Could the Coronavirus Cause the Next ‘Arab Spring’? - 23rd Mar 20
Concerned About The US Real Estate Market? Us Too! - 23rd Mar 20
Gold Stocks Peak Bleak? - 22nd Mar 20
UK Supermarkets Coronavirus Panic Buying, Empty Tesco Shelves, Stock Piling, Hoarding Preppers - 22nd Mar 20
US Coronavirus Infections and Deaths Going Ballistic as Government Start to Ramp Up Testing - 21st Mar 20
Your Investment Portfolio for the Next Decade—Fix It with the “Anti-Stock” - 21st Mar 20
CORONA HOAX: This Is Almost Completely Contrived and Here’s Proof - 21st Mar 20
Gold-Silver Ratio Tops 100; Silver Headed For Sub-$10 - 21st Mar 20
Coronavirus - Don’t Ask, Don’t Test - 21st Mar 20
Napag and Napag Trading Best Petroleum & Crude Oil Company - 21st Mar 20
UK Coronavirus Infections Trend Trajectory Worse than Italy - Government PANICs! Sterling Crashes! - 20th Mar 20
UK Critical Care Nurse Cries at Empty SuperMarket Shelves, Coronavirus Panic Buying Stockpiling - 20th Mar 20
Coronavirus Is Not an Emergency. It’s a War - 20th Mar 20
Why You Should Invest in the $5 Gold Coin - 20th Mar 20
Four Key Stock Market Questions To This Coronavirus Crisis Everyone is Asking - 20th Mar 20
Gold to Silver Ratio’s Breakout – Like a Hot Knife Through Butter - 20th Mar 20
The Coronavirus Contraction - Only Cooperation Can Defeat Impending Global Crisis - 20th Mar 20
Is This What Peak Market Fear Looks Like? - 20th Mar 20
Alessandro De Dorides - Business Consultant - 20th Mar 20
Why a Second Depression is Possible but Not Likely - 20th Mar 20

Market Oracle FREE Newsletter


Stock Markets See Red Despite Collapse in Crude Oil Prices

Stock-Markets / Financial Markets Dec 19, 2008 - 08:56 AM GMT

By: PaddyPowerTrader

Stock-Markets Best Financial Markets Analysis ArticleUS equities finished down yesterday as various pieces of bad news emerged. GE's giant financial arm GECC has been downgraded to negative by S&P . Also there's a delay in the decision by the US administration whether to bail out US automakers although there is speculation that an announcement could come as early as today. On top of all of this was a further drop in oil prices below $36 per barrel (the low since June 2004) which weighed on energy stocks, despite the 2.46M barrel output cut by OPEC. So consumer joy in Dublin, Washington and London = panic in Moscow, Tehran and Caracas. The only good news for investors was the decline in equity volatility with the VIX index dropping to its lowest level since October 3rd.

Today's Market Moving Stories

  • An Extinct Stock Market BullFor Ireland's once star pupil, Anglo Irish Bank, it just doesn't get any better. Anglo's chairman and one of the non-exec directors have resigned . This was not because of the dismal share price performance of the bank, but because both had company loans that they switched to another bank just before the year end accounting dates. The chairman's loan wasn't exactly small at €87m. Anglo has issued a damage limitation statement, but it doesn't disclose the nature of the loan. But if it was that easy to switch, you'd have to expect it was either unsecured or secured on something portable such as stocks. Anglo says the loan is not illegal but nonetheless this is damaging at a time when Anglo is trying to raise fresh capital and is being supported by state guarantees for its funding. The stock is understandable off on the open. Bond holders can only pray for a takeover, failing that nationalisation.
  • German PPI (producer prices) stats just released show the biggest drop since records began in 1949! Here comes that deflationary death spiral.
  • Its quadruple witching today in the US with expiry at 15.00. This can give rise to a massive spike in volatility particularly in thin illiquid December markets. I'll explain a bit more so. Quadruple witching is the day on which stock index, stock index options, stock options and single stock futures all expire. Incidentally, the Treasury future also expires today but people tend not to look at the boring old bond market. What it means is strange movements in equity markets as options gravitate to strikes with high open interest and flows that explode. It is Friday, six days before Xmas in the middle of a credit crunch and this will only amplify the movements.
  • European markets are opening up on the soft side with oil and mining stocks off on the fall in commodities. Moody's has cut Citibank's credit rating. HSBC is under some pressure again this morning on the back of a report that it may need to raise a further $14bn in capital to cover increased bad loan provisions.
  • Sheer genius from Credit Suisse. They are giving their senior employees bonuses in the form of $5 billion of the toxic mortgage-backed assets that nobody wants.

The ECB Will Have To Cut Rates
Back in Euro winter wonder land the ECB (as predicted here yesterday ) cut the depo rate they pay to banks that hoard cash in an attempt to get them to actually lend it on instead. This prompted the recent dramatic euro rally to come to a crashing end. To me, despite recent back peddling and down playing of rate cut expectations for their January rendezvous, I think that their hand will be forced by events and the actions of their sister central banks. Consider the evidence. On the economics side, the key German IFO sentiment has plummeted further with expectations at another record low. The trade weighted value of the euro has soared making exports uncompetitive. But even with the strong Euro, imports are even falling as domestic demand is collapsing. Add to this the myriad of sister central banks who have slashed rates lately and the heat is back on the ECB to wake up and smell the pain. Fear and angst out there or else methinks they may cease to exist after the mess is sorted out.

Japan Announces Another Stimulus Package
The Japanese government approved an emergency stimulus package worth 43 trillion yen ($489 billion) to improve a worsening employment situation and ease financing worries in the corporate sector, according to a published media report Friday. Nearly half of the package, 20 trillion yen, will be for purchasing commercial banks' equity holdings as part of efforts to improve the lenders' liquidity. An additional 640 billion yen will be used to lower premiums charged under the government's employment insurance program.

Some of the measures overlap with the 27 trillion yen emergency stimulus measures announced by the government in October. The October plan was to be financed by tapping into reserves that had been set aside in a special fiscal account dedicated for dealing with interest-rate fluctuations, with some analysts expecting the government to also issue new debt to cover its costs.

The baton in the relay race to ZIRP was passed to the Bank of Japan this morning who cut its key interest rate to 0.1% from 0.3%.

Data Today
The data calendar is as bare as Mother Hubbard's cupboard today.

And Finally… The Sunny Kim Power Training Series

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