Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

New Year Stock Market Rally Over Already?

Stock-Markets / Financial Markets 2009 Jan 08, 2009 - 12:32 PM GMT

By: PaddyPowerTrader

Stock-Markets Best Financial Markets Analysis ArticleThe Dow Jones fell 245 points yesterday in the biggest fall in a month. Stocks had their cage rattled with a quadruple body blow in the form of :


  • A gaggle of ugly earnings warnings (Intel, Time Warner, Alcoa). Expect similar very dour outlooks to come.
  • Huge private sector job cuts (that woeful ADP report, the dire Challenger report and the huge drop Monster employment index) which have caused economists to revise downwards their expectations of how bad Friday's key official Nonfarm Payroll will be.
  • Yet another confidence sapping ethics scandal (Satyam Computer, the Indian Enron). On top of Madoff this really does shake people's faith in investing. Seems bean counters PWC were asleep at the wheel in India . Ironically Satyam means “truth” in Sanskrit!
  • The biggest drop in crude prices in seven years which dragged down energy related stocks.

Added to this cocktail was the now monthly warning from banking analyst Meredith Whitney that US banks are going to have to raise a lot more capital in 2009 (which will be easier said than done). All of this has rekindled risk aversion and a bit of a bunker mentality ahead of Friday at 13.30.

Today's Market Moving Stories

  • I think that the very downbeat earnings forecast from Intel, one of the stocks considered most representative of the underlying health of corporates, is very significant. This is their second warning on Q4 earnings in jig time and should pressure the tech heavy DAX in particular today. Even Chinese computer makers are feeling the heat .
  • No matter what paper you read today there is nothing but dire economic news; from US commercial real estate to the restaurant business to plummeting German exports .
  • Mineral extractors (read BHP Billiton, Rio Tinto, Anglo American, Xstrata, ArcelorMittal) are under pressure today on the renewed weakness in commodity prices and general gloomy global outlook. RBS is managing to buck the trend. Its shares are up on reports that they are considering selling their £2bn stake in Bank of China. The retrenchment and de-leveraging continues apace.
  • On the back of Oppenhemeir's star analyst Meredith Whitney's dire warnings, here's another hard edged and punchy article on banks by Doug McIntyre.
  • The ongoing global scale of the crisis is beginning to get even nastier with a spate of suicides .
  • Everyone wants a piece of the Bailout Nation, even the porn industry . Will the TARP become the TART?

Data Today
The BoE's MPC meet at high noon today and are set to cut rates to their lowest level since the bank was founded in 1694. The median expectation is for a 0.5% reduction to a mere 1.5%. But there are plenty of punters and economists looking for a shock and awe cut of 0.75% to the full monty 1%, particularly as the London Times is reporting that the government is considering printing money.

The bugbear remains the weakness of the currency and the historical fact that Sterling has been very prone to speculative attacks and requires huge capital inflows to balance the books. The key question is will the market will be “underwhelmed” by a mere 0.5% rate cut? It will be interesting to see if they make any statement on quantitative easing.

Just how uncertain the market is about today's decision is aptly demonstrated by the London Times Shadow MPC vote which saw three members call for a 100bp cut today, three for 50bp, and three for no change. Despite this disparity of views, there was a shared belief that there is a growing urgency to focus on policies beyond conventional rate cuts to address the ongoing blockages in the transmission mechanism. Some believe that any further rate cuts are academic due to the lack of pass-through, and others think that rates should be cut as low as possible, as fast as possible, before quantitative easing measures are introduced.

And Finally… Watch Out 2009

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”.

© 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

© 2005-2022 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