Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Global Stock Markets Break Hard To The Downside – Watch Support Levels - 23rd Sep 20
Beware of These Faulty “Inflation Protected” Investments - 23rd Sep 20
What’s Behind Dollar USDX Breakout? - 23rd Sep 20
Still More Room To Stock Market Downside In The Coming Weeks - 23rd Sep 20
Platinum And Palladium Set To Surge As Gold Breaks Higher - 23rd Sep 20
Key Gold Ratios to Other Markets - 23rd Sep 20
Watch Before Upgrading / Buying RTX 3000, RDNA2 - CPU vs GPU Bottlenecks - 23rd Sep 20
Online Elliott Wave Markets Trading Course Worth $129 for FREE! - 22nd Sep 20
Gold Price Overboughtness Risk - 22nd Sep 20
Central Banking Cartel Promises ZIRP Until at Least 2023 - 22nd Sep 20
Stock Market Correction Approaching Initial Objective - 22nd Sep 20
Silver Bulls Will Be Handsomely Rewarded - 21st Sep 20
Fed Will Not Hike Rates For Years. Gold Should Like It - 21st Sep 20
US Financial Market Forecasts and Elliott Wave Analysis Resources - 21st Sep 20
How to Avoid Currency Exchange Risk during COVID - 21st Sep 20
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Inactive Obama Leads Stock Market Indices Lower

Stock-Markets / Financial Markets 2009 Feb 05, 2009 - 03:55 AM GMT

By: PaddyPowerTrader

Stock-Markets Best Financial Markets Analysis ArticleThe Dow Jones fell below 8,000 again yesterday after dodgy earnings from Kraft, Sara-Lee and Costco (are people really that cash strapped that they are cutting back on basics?) and expectations of uber weak January retail and chain stores sales numbers. Tech bellwether Cisco warned on revenues overnight.

Markets are greedy beasts; the avarice for fresh news is insatiable and they abhor a vacuum. So the distinct lack of any new tangible information on the US macroeconomic policy front is now becoming an issue. Earlier hopes for a swift delivery of solutions from the Obama administration have dimmed further pressuring stocks which continue to face the headwinds of dire earnings, no guidance and woeful economic data.

Today's Market Moving Stories

  • Lots of chat on the wires overnight from various US policymakers. US Senator Dodd (Chair of the Banking Committee) stated that the creation of a systematic risk regulator, possibly the Fed, would be considered to strengthen and centralise financial oversight. Fairly priceless coming from a man who spent his career being sponsored by Fannie Mae and Freddie Mac to prevent just such a thing happening! Influential Senator Shebly meanwhile said in a candid moment that that the TARP had drifted rudderless and wasted millions (I'd say billions) of taxpayers money. US Treasury Secretary Tim Geithner has promised to give a comprehensive outline of the NEW program for financial recovery later this week.
  • Warren Buffet's Berkshire Hathaway has invested CHF 3bn in Swiss Re after their horror show results this morning and may be prepared to put in CHF 2bn more to strengthen the company's capital base. Now while the Sage extracted his customary pound of flesh, a 12% coupon and the right to exchange into equity in 3 years at CHF 25, Buffet has a pretty poor record when it comes to investing in financials. Think Goldman Sachs etc! And what of Bank of America?! Down 40% on the week to below the key 5 bucks mark for the first time since 1990. They look increasingly like going the way of Citibank. Yes nationalisation of America's biggest bank beckons which would wipe out the common stock holder. A report in the WSJ implies strongly that BoA wanted to exit the Merrill Lynch deal last December but had their arm unceremoniously twisted by Bernanke and Paulson.
  • Other European financials reporting this morning made for all too familiar grim reading. Deutsche Bank's results were awful and they look VERY capital light i.e. their leverage ratio is still 28: 1, so either they have to continue to de-leverage or raise extra equity / capital. Spain's Santander and Denmark's Danske (who own NIB in Ireland which was a big drag) also spectacularly missed targets, the latter by a country mile. Prudential came in with numbers that can only be described as diabolical and not even on the same page as analysts expectations and Swedish bank SEB is planning a rights issue (good luck).
  • Tullow Oil, in a drilling update, said that an upgrade for their Kingfisher field is a possibility. With the US foods sector under pressure Irish stocks Kerry, Greencore and Glanbia all of whom have significant investments in this market may feel a chill.
  • On a lighter note, some career opportunities .

The Irish Banks Saga
The Irish Times reports that the Irish Cabinet has already signed off on legislation allowing the National Pension Reserve Fund to be used to help recapitalise the country's banks. The recapitalisation will most likely in the form of preference shares being injected into the banks, which will bear annual interest of 8%. Separately the directors and top executives in AIB and Bank of Ireland are facing large cuts in pay as a condition of the bank recapitalisation. The Irish PM, the Taoiseach, told the Dáil yesterday that he expected the upper limit on pay for the highest earners at both banks to be cut by at least 25%.

Davy Stockbrokers have cut their estimates for three of the four Irish banks (BoI, AIB and Anglo). They now only expect Irish Life & Permanent to make a profit in 2009/10.

Shipping News
Once again there's a huge amount of discussion surrounding the Baltic Dry Freight index. This rose by 15% yesterday to 1316 points, having rallied the best part of 50% so far this year. It's worth putting that in context though - it was down 94% from peak (July last year) to trough (December). It's now down ‘only' 90%.

There are some positives worth considering. The bottoming out of the index is important. It's a hard push to say that the index is recovering but at least it isn't falling any more. The other big issue is one of constituents, capesize prices, have rallied more sharply than any other Baltic constituent, up almost 8 times from the low to around $15k per day. This could be an indication that demand is starting to increase again from China after the slowdown because of the Olympics.

Data And Earnings Today
We have two interest rate decisions from Europe today. Markets expect the Bank of England to cut rates by another 50 basis point at noon to a new record low of 1%. In contrast, at 12.45, the dangerously inflexible ECB is universally expected to cowardly hold fire and hide in their blinkered bunker until next month in the face of imminent deflation.

This would be the first month since last summer that the two central banks have chosen a different policy path in direction. That said, I think that it is only a matter of time before policymakers on both sides of the Channel end up lending money essentially for free as events as always will yet again trip up the incompetent ECB who still just don't get it. Watch out for some interest questions at the ECB's press conference on the rumbling idea of Quantitative Easing at 13.30.

Earnings today from Kellogg (expected EPS $0.50), MasterCard ($1.62), Unilever, Hartford Financial ($1.30), News Corp ($0.19) and Burger King ($0.37).

And Finally… Another Masterpiece Rant

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”.

© 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 - 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