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
Beware Gold Stocks Downside - 13th Dec 19
Fed Says No Interest Rate Hikes In 2020. What About Gold? - 13th Dec 19
The ABC’s of Fiat Money - 13th Dec 19
Why Jo Swinson and the Lib Dems LOST Seats General Election 2019 - Sheffiled Hallam Result - 13th Dec 19
UK General Election 2019 BBC Exit Poll Forecast Accuracy Analysis - 12th Dec 19
Technical Analysis Update: Tadawul All Share Index (TASI) - Saudi Arabia ETF (KSA) - 12th Dec 19
Silver Miners Pinpoint the Precious Metals’ Outlook - 12th Dec 19
How Google Has Become the Worlds Biggest Travel Company - 12th Dec 19
UK Election Seats Forecasts - Tories 326, Labour 241, SNP 40, Lib Dems 17 - 12th Dec 19
UK General Election 2019 Final Seats Per Party Forecast - 12th Dec 19
What UK CPI, RPI INFLATION Forecasts for General Election Result 2019 - 11th Dec 19
Gold ETF Holdings Surge… But Do They Actually Hold Gold? - 11th Dec 19
Gold, Silver Reversals, Lower Prices and Our Precious Profits - 11th Dec 19
Opinion Pollsters, YouGov MRP General Election 2019 Result Seats Forecast - 11th Dec 19
UK General Election Tory and Labour Marginal Seats Analysis, Implied Forecast 2019 - 11th Dec 19
UK General Election 2019 - Tory Seats Forecast Based on GDP Growth - 11th Dec 19
YouGov's MRP Poll Final Tory Seats Forecast Revised Down From 359 to 338, Possibly Lower? - 10th Dec 19
What UK Economy (Average Earnings) Predicts for General Election Results 2019 - 10th Dec 19
Labour vs Tory Manifesto's UK General Election Parliamentary Seats Forecast 2019 - 10th Dec 19
Lumber is about to rally and how to play it with this ETF - 10th Dec 19
Social Mood and Leaders Impact on General Election Forecast 2019 - 9th Dec 19
Long-term Potential for Gold Remains Strong! - 9th Dec 19
Stock and Financial Markets Review - 9th Dec 19
Labour / Tory Manifesto's Impact on UK General Election Seats Forecast 2019 - 9th Dec 19
Tory Seats Forecast 2019 General Election Based on UK House Prices Momentum Analysis - 9th Dec 19
Top Tory Marginal Seats at Risk of Loss to Labour and Lib Dems - Election 2019 - 9th Dec 19
UK House Prices Momentum Tory Seats Forecast General Election 2019 - 8th Dec 19
Why Labour is Set to Lose Sheffield Seats at General Election 2019 - 8th Dec 19
Gold and Silver Opportunity Here Is As Good As It Gets - 8th Dec 19
High Yield Bond and Transports Signal Gold Buy Signal - 8th Dec 19
Gold & Silver Stocks Belie CoT Caution - 8th Dec 19
Will Labour Government Spending Bankrupt Britain? UK Debt and Deficits - 7th Dec 19
Lib Dem Fake Tory Election Leaflets - Sheffield Hallam General Election 2019 - 7th Dec 19
You Should Be Buying Gold Stocks Now - 6th Dec 19
The End of Apple Has Begun - 6th Dec 19
How Much Crude Oil Do You Unknowingly Eat? - 6th Dec 19
Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast - 6th Dec 19
Gold Price Forecast – Has the Recovery Finished? - 6th Dec 19
Precious Metals Ratio Charts - 6th Dec 19
Climate Emergency vs Labour Tree Felling Councils Reality - Sheffield General Election 2019 - 6th Dec 19
What Fake UK Unemployment Statistics Predict for General Election Result 2019 - 6th Dec 19

Market Oracle FREE Newsletter

UK General Election Forecast 2019

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