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
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
The IPO Market Is Nowhere Near a Bubble - 9th Oct 19
US Stock Markets Trade Sideways – Waiting on News/Guidance  - 9th Oct 19
Amazon Selling Fake Hard Drives - 4tb WD Blue - How to Check Your Drive is Genuine  - 9th Oct 19
Whatever Happened to Philippines Debt Slavery?  - 9th Oct 19
Gold in the Negative Real Interest Rates Environment - 9th Oct 19
The Later United States Empire - 9th Oct 19
Gold It’s All About Real Interest Rates Not the US Dollar - 8th Oct 19
A Trump Impeachment Would Cause The Stock Market To Rally - 8th Oct 19
The Benefits of Applying for Online Loans - 8th Oct 19
Is There Life Left In Cannabis - 8th Oct 19
Yield Curve Inversion Current State - 7th Oct 19
Silver Is Cheap – And Getting Cheaper - 7th Oct 19
Stock Market Back to Neutral - 7th Oct 19
Free Market Capitalism: Laughably Predictable - 7th Oct 19
Four Fundamental Reasons to Buy Gold and Silver - 7th Oct 19
Gold and Silver Taking a Breather - 7th Oct 19
Check Engine Warning Light ECU Dealer Diagnostic Cost - Land Rover Discovery Sport - 6th Oct 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast Oct - Dec 2019 by Nadeem Walayat

Big Pharma Fails to Stimulate Downbeat Dow Stock

Stock-Markets / Financial Markets 2009 Mar 10, 2009 - 03:44 AM GMT

By: PaddyPowerTrader

Stock-Markets Best Financial Markets Analysis ArticleThe Dow Jones is Bear-ing down on the 6,500 level, as a bout of merger mania (Merck's proposed $41.1 billion takeover of arch rival Schering-Plough) fails to bring out the buyers . Stocks ended a yo-yo session on the back foot. Weighing on the market were heavyweight comments from the former Sage of Omaha Warren Buffett that the current environment was akin to an “economic Pearl Harbor” while Dr Doom Prof Nouriel Roubini chimed in with his view that the US recession (depression) could last another three years.


The only bright spark was the fact that financials held in ahead of helicopter Ben Bernanke 's meeting with President Obama today and his speech on banking regulation. Note there are now six Dow stocks below $10 and volume is anemic. And all this in spite of news that Genentech are close to accepting a $95 bid from Roche as it scores a sweetened deal. There are also reports that Dow , Rohm and Haas are also near shaking hands - the judge is saying Dow will honour the agreement at $78 a share. All these are big ticket stories that in any other market would have ignited a bid.

Today's Market Moving Stories

  • The Nikkei closed at its lowest point in 26 years on overnight news of a Fitch rating agency report suggesting that the six leading banking groups in Japan have unrealised losses on stock holdings of over Yen 1trillion (no wonder people want to do away with that pesky transparency of mark-to-market accounting). Note that fiscal year end for Japan is the end of March, so we traditionally see some profit taking and repatriation for window dressing purposes at this time of year.
  • Crude is on the rise ahead of OPEC meeting as traders eye the real prospect of more production cuts. It closed at the upper end of its 4 month range at $50.50.
  • The always-readable Doug A. McInytre picks 5 tech stocks which may double by end 2010 . And Nomura are spreading some cheer about 50 UK stocks which have quietly gained more than 10% this year .
  • Shot to piecesThe EU has said “NON!” and given a firm thumbs down to Larry Summers grand fiscal plan floated in the FT yesterday. German finance minister Peer Steinbruck said that the EU wanted to wait and see how the present stimulus package works. Jean-Claude Juncker said recent US proposals for additional stimulus spending were “not to our liking”. European finance ministers apparently believe that building up more debt would threaten the economic stability of the euro area. There is also a leaked paper doing the rounds, which EU finance ministers have agreed, according to which there will be no economic recovery even next year.
  • Irish snippets. The Irish Independent is reporting CRH may have as much as €4bn in its war chest for acquisitions after its rights issue . With competitors under severe pressure financially, CRH could add 35c plus to its EPS over the next 18 months if it ramps up expenditure on “stressed asset” sales. Fyffes 2008 results were slightly ahead of forecast. They represent solid earnings in a very challenging environment. Guidance was inline with expectations.
  • French Industrial production figures hot off the presses show it plummeting 3.1% MOM (versus a market consensus of –0.6%). An ugly number.
  • Its reassuring in a topsey turvey world that some things don't change .
  • Would you trust these guys with YOUR money?

UK Economic News Not Looking Any Better
In UK news this morning, the RICS housing price balance and BRC retail sales monitor are adding to the GBP's woes. The RICS showed the house price balance at -78, with transactions dropping to the lowest since the survey began thirty years ago. Meanwhile, the retail sales monitor showed spending up just 0.1% YoY in February versus 3.2% in January. UK Industrial Production data later this morning will add to the economic doom and gloom, showing a 8th consecutive monthly decline.

The latest lurch downward for the GBP owes little to weak data, which has now become the norm for UK markets, but rather renewed concerns over the banking sector as the government upped its stake in the Lloyds TSB group over the weekend. The quantitative easing (QE) policy announced last week, with the BoE buying gilts to boost the money supply is also impacting. On the whole, the impact of QE should be marginally positive. In the longer term it should boost liquidity and help rebuild confidence. In the short term however the prospect of a wave of gilt buying is reducing yields - the 10 year gilt fell below 3% for the first time in decades yesterday, and adding to GBP's woes.

Credit Markets Deteriorating Again
If the credit market is your bellwether of the crisis, then take cover because the indicators are deteriorating again rapidly. Europe's iTraxx crossover index , an index of CDS on a basket of junk-rated corporate bonds, rose to a new record of 1170bp; the US CDX index , on a basket on 125 investment-grade corporate bonds, rose to 250bp. According to the FT, this deterioration reflects uncertainty about the state of the financial system and the possible bankruptcy of one or two US car makers. While most of the financial burden has been shared by the taxpayer and shareholders, there are now fears that bondholders will have to bleed as well. Problems are also building up in the money markets , after a period of improvement late last year. Libor hit a low of 1.08% in mid-January and is now back up to 1.31%. The renewed pressure in Libor is weighing on interest rate swap spreads, which reflects the credit quality of banks in the inter-dealer derivatives market. The two-year swap spread is back above 80bp. Recall my warning that March 18th represents a date for your diary as it's the quarterly calendar roll for a whole host of derivative products. Rolling involves paying margin calls which must be funded and if money's too tight to mention well then we may see another spectacular corporate failure.

Data Today
US Fed Chairman Ben Bernanke speaks today on bank regulation (12:30 GMT). Other than that there are no major events or data.

And Finally… Tim Geithner Gone By June

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