Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Inflation Consequences for the Stock Market, FED Balance Sheet - 24th Oct 21
To Be or Not to Be: How the Evergrande Crisis Can Affect Gold Price - 24th Oct 21
During a Market Mania, "no prudent professional is perceived to add value" - 24th Oct 21
Stock Market S&P500 Rallies Above $4400 – May Attempt To Advance To $4750~$4800 - 24th Oct 21
Inflation and the Crazy Crypto Markets - 23rd Oct 21
Easy PC Upgrades with Motherboard Combos - Overclockers UK Unboxing - MB, Memory and Ryzen 5600x CPU - 23rd Oct 21
Gold Mining Stocks Q3 2021 - 23rd Oct 21
Gold calmly continues cobbling its Handle, Miners lay in wait - 23rd Oct 21
US Economy Has Been in an Economic Depression Since 2008 - 22nd Oct 21
Extreme Ratios Point to Gold and Silver Price Readjustments - 22nd Oct 21
Bitcoin $100K or Ethereum $10K—which happens first? - 22nd Oct 21
This Isn’t Sci-Fi: How AI Is About To Disrupt This $11 Trillion Industry - 22nd Oct 21
Ravencoin RVN About to EXPLODE to NEW HIGHS! Last Chance to Buy Before it goes to the MOON! - 21st Oct 21
Stock Market Animal Spirits Returning - 21st Oct 21
Inflation Advances, and So Does Gold — Except That It Doesn’t - 21st Oct 21
Why A.I. Is About To Trigger The Next Great Medical Breakthrough - 21st Oct 21
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Chinese Whispers A Worry For Stocks

Stock-Markets / Financial Markets 2009 Jul 29, 2009 - 03:46 AM GMT

By: PaddyPowerTrader

Stock-Markets

Best Financial Markets Analysis ArticleThe two potential market moving economic catalysts Tuesday pointed in opposite directions, with the Case Shiller survey suggesting that the pace in price declines in U.S. real estate is slowing, but with the consumer confidence number slipping to 46.3 (from 49.3 in June), the market decided to call it a draw stocks meandered into the close broadly flat.


U.S. health insurance stocks had a good day because it appears that the health care reform package working its way through Congress will not include a government-run health insurance option. To the downside were oil producers, after BP’s profit plunged by 53% and downbeat comments from CEO Tony Hayward. The fall in crude prices by $1.15 barrel didn’t help, needless to say.

For stocks though, as long as we continue to judge the performance of a company against the benchmark of horribly misguided guesstimates by a cabal of influential analysts instead of looking at the quality of the underlying earnings, then stocks will rally no matter what the underlying real story is (i.e. slashing costs is not long term substitute for revenue and profit growth).

Today’s Market Moving Stories

  • Japanese retail sales fell more than expected in June from a year earlier, suggesting that worsening job and income conditions were offsetting the positive effects on spending of government stimulus measures. The outlook for consumption is weak with summer bonus payments likely to fall from last year’s levels, which may add to downward pressure on prices as Japan struggles with its second spell of deflation in a decade. Retail sales fell 3.0 percent in June from the same month a year earlier, more than a median market forecast for a 2.5 percent decline, marking the 10th straight month of falls. While government subsidies on energy efficient appliances have boosted sales of flat screen TVs and air conditioners, spending on other items remains very subdued.
  • China State Construction Engineering Corp (CSCEC), whose $7.3 billion initial public offering last week was the world’s largest in a year, jumped 60% on debut, besting expectations, but also stirring concerns about asset price bubbles. It was the second big listing in Shanghai since China resumed IPOs last month, and followed on the heels of Sichuan Expressway’s runaway success on Monday. Local-currency A shares in CSCEC, China’s biggest homebuilder, kicked off trading at 6.70 yuan, well above their IPO price of 4.18 yuan, and then climbed to 90 percent above the public offer price within 15 minutes of trade.
  • San Franciso Fed’s Janet Yellen sees “first solid signs” of end of US recession, although the recovery is likely to be “painfully slow” as consumers spend less and save more, she warned. In response to audience questions, Yellen said the Fed would need to stay “ahead of the curve” and tighten policy before the unemployment rate returns to a more normal level of about 5 percent. “That said, this is not the time” to raise rates, she said, pointing to the fact that risks to the outlook remain, with the commercial property slump the biggest threat. Otherwise, Yellen expressed optimism regarding the price of US Treasuries, which she said should remain “strong because savings throughout the global economy is very strong and competition from private issuance is very weak.” We have indeed pointed out for a long time that overall the stock of US debt (public + private) will soon start to shrink.
  • In Irish news, ahead of the publication of the NAMA legislation on July 30th, the latest report from Richard Ellis CBRE suggests that demand in the Dublin office market showed a bit of a pick-up in Q2, albeit from a very low base. Dublin office take-up in Q2, at 23,242 square metres, was over double the Q1 level although it remains c.30% lower year-on-year and well below the five-year average for the quarter, which CBRE puts at 40,000 square metres. Meanwhile, prime yields reportedly held steady ay 7.5%. Regarding NAMA the Irish Times, quoting Government sources, reiterates that the value of the assets being taken over by NAMA will be ‘based on the underlying collateral, adjusted for the longer-term economic value in line with EU guidelines … on a case by case basis’.
  • According to Bloomberg the European Stoxx 600 is now valued at 28.1 earnings. It’s most stretchy level since January 2004. Be careful out there.
  • Always worth a read. Jeremy Grantham’s quarterly words of wisdom.
  • The safest place to put your money.
  • In spite of all the hype, it seems bank failures are picking up. No doubt we will be told that this is just another lagging indicator.
  • In politics William Shatner turns Palin’s speech into beat poetry.

Chinese Banks To Row Back On Lending
Chinese stocks are well off overnight (-8%) as it seems someone is about to take the punch bowl away. China’s two biggest state-owned commercial banks have put a lid on their 2009 lending targets, according to domestic media reports, in a move that will significantly slow overall Chinese credit growth in the second half. Industrial and Commercial Bank of China (ICBC) is aiming to issue full-year new loans of 1 trillion yuan ($146.4 billion), while China Construction Bank (CCB) has set a goal of 900 billion yuan, Caijing magazine reported.

The two banks, China’s largest by market value, granted new loans of 825.5 billion yuan and 709 billion yuan, respectively, in the first half. If they stick to their reported targets, this would imply that ICBC would have already issued 83 percent of its full-year lending total, while CCB would have already issued 79 percent. Overall, Chinese banks issued a record 7.37 trillion yuan in new loans in the first six months, easily topping the full-year figure of 4.91 trillion yuan in 2008 and igniting concern that excess liquidity was leading to stock and property bubbles.

Data Today
The German CPI and HICP that will be released today (no time announced at time of writing) I think will be on the weak side, possibly flat, such that annual inflation should turn negative for the first time since 1986.

There are signs of a pick-up in housing and UK mortgage lending fiures (released at 09:30) should rise by £600mln (new mortgage approvals should rise to 46K). Firmer retail sales should underpin net consumer credit of £300mln.

US Durable Goods Orders should disappoint with a 2% fall; it’s released at 13:30 today.

Earnings from ConocoPhillips, Sprint Nextel, Time Warner, WellPoint Health, Visa.

And Finally… Some Merle Hazard


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