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Oct 19

10.18.11

The View:

Investors still remain jittery and uncommitted to any rally
in global markets.

Asia Markets:

Asian markets ended sharply lower in Tuesday trading
sessions. Continued investors nervous about the Euro-zone debt crisis,
weakening economic numbers from China, and IBM ‘s earning report caused the
markets to tumble. The Nikkei lost 1.6%, Hang Seng tumbled 4.2% and Shanghai
fell 2.3%.

Already jittery investors got several new reasons to become even more cautious of the markets.  First, the same comments that rocked both the European and US markets took it toll on
Asia Tuesday.  Comments on Monday from Merkel calling the idea of a comprehensive bailout plan a”Dream” dashed the euphoria investors were feeling toward the subject. The second, economic data
out of China showed GDP grew at a rate of 9.1%, which for most of the global
would have made us dance however, in China it was below expectations and
substantially lower than the 9.5% gained in the second quarter.  This growth however was still strong enough to potential  dampened  any hopes that China would begin to loosen it’s
monetary policy.

European Markets:

European shares declined in their Monday session after
comments from euro-zone officials put a damper on investor’s high hopes of a
speedy yet comprehensive bailout plan. Early gains were erased after German
Finance Minister Wolfgage Schaeuble commented the upcoming European Union
summit may not bring a solution to the euro-zone debt crisis. German Chancellor
Angela Merkel agreed calling the resolving of all the problems at the EU
summit was a dream.  Harsh words after
the G-20 finance ministers of the weekend tried to reassure nervous investors
by calling for a complete plan that will help tackle the European debt crisis
be announced at the European  Union summit next week.  Except for a bit of
reassure to investors the G20 meeting failed to yield any significant progress
toward the Eurozone debt crisis. Also adding to fears of a stalling global economic
picture, data released this morning from the US showing a significant drop in
manufacturing.

European stocks were bumpy in their early Tuesday trading. Causing
the decline China’s disappointing GDP numbers, UK reported inflation, and rumor of a potential downgrade of France’s covited triple AAA rating.

US Markets:

US Markets declined on Monday for their worst session in two
weeks, as the fuel that has fired the rally over the last two weeks is starting
to run out. The Dow plumpted 247.49 points, the S&P fell 23.72 points and
the Nadsaq lost 52.93 points.  The Dow and Nasdaq are now both  down 1% year to
date. The S&P is down 4.5% for the year.

The markets were in the red from the start with bleaker
economic reports caused investors to again feel jittery about the US economic picture.
The Empire State index, a gauge of the  manufacturing sector,  printed -8.5. The number was  down for a fifth month in a row in October after a slight improvement from September.
The industrial production also reported this morning, rose 0.2% in
September on increase demand for cars and computers. Both reports show a
continued slowing of the US economy.

Also weighing on investors minds the second bank after JP
Morgan Chase, Wells Fargo, reported lack luster earnings.  Wells reported, for the first time in two
years, disappointing Q3 quarterly results. Analyst and investors were caught
off guard as Wells was considered one of the least vulnerable banks to the
recession because of it’s low cost deposits and steady lending.

Treasury’s continued to be the beneficiary of global nervous
investors closing Monday at 2.159%.

As investors flocked to Treseary’s the moved away from Gold.

Food commodities such as Corn, Soybeans, Wheat were all down
as investors remain pessimistic about global demand.

Oct 17

10.14.11

The View:

Investors and the markets are become more jittery than optimistic.

Asian Markets:

Asia markets closed down in their Friday session on downgrade
of Spain and economic news from China. The Shanghai was down 7.41 points, Hang
Seng was down 256.02, and the Nikkei was down 75.29 points.

China reported a CPI of 6.1%; expectations were for 6.2%,
and a PPI of 6.5% well off the 7.3% that was reported in August.  Markets were a bit disappointed as they were hoping to receive significantly lower numbers prompting the Chinese government
to start loosening monetary policy. Unfortunately, that was not the case as
inflation still remained at uncomfortable levels prompting some in Investors Friday
to take money off the table.

European Markets:

Shares in the European Markets fell on Thursday with the
financials taking some of the hardest hits. Investors began losing their euphoria with European officials and plans to stabilize their debt issue.  Weak data from China and a downbeat earnings from JP Morgan Chase seemed to reignite market’s jittery nervous.

Investors and the markets seemed to get back to their jittery
self’s after little details were forthcoming from European Commission President
Manuel Barroso outlined the plan late Wednesday.

Financials had already taken a beating in the early morning trading after JP Morgan slight drop in 3rd quarter earnings, when Fitch slashed its ratings on Royal Bank of Scotland and Lloyd’s after their diligence determined they were less like to receive UK government support in the future. Also Fitch
added Barclay’s to its negative rating watch list sending the shares down 7.4%.

Two pieces of news did seem to steady the markets. First,
Fitch confirmed the UK’s triple a rating with a stable outlook. This despite
the rumor circulating Fitch would instead downgrade the countries ratings. The
markets also seemed a bit pleased with Slovakia final approving the EFSF plan
allowing the plan to become operational.

European markets rallied in their early Friday morning
session despite downgrades of banks. Fitch downgrade UBS and placed several banks on their negative outlook.

US Markets:

US Markets closed mixed on Thursday as the financial sector
lead the way after JPMorgan reported softer Q3 earning numbers.  The Dow fell 40.72, S&P erased 3.59 points and the NASDAQ closed positive 15.51.

JP Morgan, thought by many to be not only a bell weather
stock but one of the top financial stocks, took a hit on Thursday after report
weaker earnings. JPM’s earning stroked new investor fears about health of US
banking industry and what banks who reporting earnings will look like. Investor’s
nerves are starting to become a bit jittery as earning season moves in next
week.

Commodities were also lower on Thursday. Crude fell for a
second straight day sliding to $84.23 a barrel. Gold also traded down 0.8%.

Food Commodities were mixed on Thursday. Corn and wheat were
down, however Soybeans were up as the traders and the market continued to react
to Wednesday crop report.

Treasury’s yield continued to stay around the 2.00 mark in
yield.

Oct 13

10.13.11

The View:

Investors and markets are feeling more confident about the
Eurozone’s issues allowing the risk trade to be put back on the table.

Asian Markets:

Asian markets climbed on Thursday. The Nikkei gain 1%, Hang
Seng rose 2.3% and the Shangai composite added 0.8%.

Exporters and resource companies were among the biggest
gainers as Asian markets felt more comfortable that the latest plan to resolve
the European soverign-debt woes still stood a shot at passing all it’s
obstacles.  The markets rallied despite China reporting lower export growth in September coming in at 17% , the weakest number since February, caused by a stalling global economy . Also reported
China’s Trade Surplus fell in September. More signs that China’s economy is defiantly
in slowdown mode causing analyst to wonder what effects it will have on Europe’s
economy future.

Exporters were among the best performers as investors were
encouraged that economic stability in Europe may be on the horizon and could
help sustain a slowdown in the European economy.  Resource stocks also notched solid gains as
economic sentiment  and the prospects for demand to improved.

European Markets:

European stocks ended their Wednesday session higher.  Financial shares lead the gains amid investor’s expectations that European policy makers will finally work out a plan to stem the euro zone debt crisis. Despite Slovkia’s initial rejection of the EFSF expansion investor felt confident by the news that lawmakers in the country were going to regroup and hold another vote
before the end of the week. Investors nervous also seemed to settle down as the
European Commission, the Eurozone’s executive arm, called on European
governments to release a the sixth tranche of emergency lending to Greece and
move the Eurozone’s permananet rescue fund up by a year. The commission also
stated the European Stability Mechanism should be up and running in July 2012
not the mid-2013 previously predicted. The European Stability Mechanism is the permanent bail out program that would replace the current EFSF program.  Most importantly, the European commission stated the EFSF should be available as a last resort to lend money to governments
in need. Finally the markets heard that progress is being made.

Also aiding the European market’s rally the release of better than expected Euro-zone data. The data released Wednesday morning showed industrial production in August rose 1.2% from July and rose 5.3% year to year.

European markets were lower in their early Thursday morning
trading session on new concerns about the European economic picture for the
rest of the year and a warning from Deutche bank that earning maybe worse then
first thought due to the effects of the debt crisis. The ECB in it’s monthly
report said the EZ economy is slowing down and could be facing several
headwinds in the last quarter of the year. Trichet also said Thursday that
forcing private bondholders to accept losses on sovereign debt could damage the
euro’s reputations.  The latest bailout plan for Greece negotiated during the summer called for a voluntary exchange of Greek bonds. This element of the plan is now being called into questions and some want to make it a mandatory part of the equation.

US Markets:

US stocks rallied Wednesday amid investors continued
optimism about European ‘s plans to stabilize their banking system. The Dow,
which is now up 5.6% on the month, gained 102.55 points. The NASDAQ climbed
21.70 and the S&P gained 11.71 points.

Despite investors putting risk back on the table several
market watchers content that Wedsenday’s rally was caused by short covering and
that the market is still stuck in the same trading range that began nearly two
months ago.  The Dow has been range bound between 10700 and 11700 mostly reacting to headlines from the European debt crisis and fears of an US and global recession.

The dollar was weaker in Wednesday trading causing Gold to
rise 1.3% to $1681.30.

Oil  closed down 0.3% as the International Energy Agency lowered it’s forecast for global oil demand.

Food Commodities were down after the USDA released it’s crop report yesterday cutting it’s outlook for corn for the third consecutive month. Still traders are optimistic the rally is long from over . As corn prices go down speculation calls for dips in price to spur foreign buyers such as China.

13

10.12.11

The View:

Investors still remain jittery about the European debt
crisis and the global economic picture.

Asia Markets:

Asian Markets finished it’s Wedesenday session up. Gains
from Chinese banks helped to offset losses connected with Alcoa’s weak earnings
and the Slockia snag in the European bailout saga. The Hang Sang rose 1% after
a drop of 1.9% during the trading session. The Shangai Composite rose 3% while
the Nikkei lost 0.4%. Asian markets were headed for gains this week after a
string of good news from Europe and China’s soverign-wealth fund buying up
shares of selected beat down banks.
Unfortunately, the Slovakian parliament rejected the plan to expand the
EFSF took it’s toll on investors jittery nerves.

European Markets:

European stock markets ended it’s Tuesday session lower
however, the markets did close off session lows. The Markets received a bit of
good news as representatives from the IMF,EU Commission, and ECB (aka.the
troika) announced Greece would likely receive it’s next installment of aid at
the start on November.  The news seemed
to calm investors who were trying to brace themselves for the news out of
Slovakia and the start of earning seasons might be.

US Markets:

US Markets closed mixed on Tuesday as the markets watched
and waited for Slovika to deliberate and vote on the European bail out fund.
The Dow traded in a range of 82.19 points closing down 16.88 points. The Nasdaq
added 16.98 points while S&P added 0.5%.

Most food commodities such as soybeans, corn and wheat were
up Tuesday as the markets waited for the Crop report due out on Wednesday .  Grain prices surged on Tuesday on news Russia plans on limiting it’s exports  again this year.

Gold closed down  Tuesday by $9.00. Oil was  up slightly.

Oct 11

10.10.11

The View:

Despite sketchy details about the new plan for the Euro zone
banks and lower volumes across all the global markets traders and investor
became more confident in the global economic picture.

Asian Markets:

Asian market rallied in their Tuesday trading session after
news Monday that China’s sovereign wealth fund was purchasing shares of China’s
battered banks hoping to reestablish credibility to the sector. The banking
sector in China has taken a beating over the last couple weeks. Analyst
believes the recent sell off of China’s banks reflected a broader loss of trust
and integrity of corporate earnings and government statistics.  The integrity of Chinese corporations were called into question recently after a small group of US listed companies were
accused by investors of misrepresentation of accounting issues.  The Hang Seng rose 2.4%, the Nikkei gained 2% and the Shanghai Composite rose 0.2%.

European Markets:

European stocks ended their Monday trading session with
strong gains after Germany and France vowed to present a comprehensive plan to
help deal with Euro zone banks including recapitalizing the sector.  Not even news that the Bank of Greece had activated the Financial Stability fund in hopes of saving Proton Bank could
dash investor optimism.

Financial stocks led the rally on news of the progress made on Sunday from the Sarkozy/Merkel summit. Also helping boast shares news from China’s sovereign wealth fund bought shares of banks today on the Shanghaimarket.

European market were down in their  early morning Tuesday trading session as the
markets held their breath and wait for the results of the crucial  Slovakia
parliamentary vote to expand the Euro-zone rescue funds. Banks stocks
continued to be choppy as investors wait to see if the plan will finally be
approved by all the EZ countries.  If the
fund is expanded it will help ease concern by providing a fund to help provided
liquidity to countries in need.  Slovakia
will be an important vote since it is the last member to vote on the plan. The countries
governing coalition failed to reach an agreement while Prime Minster Iveta
Radicoa upped the stakes by attaching a vote of confidence in the government.

Also on the mind of the markets Tuesday morning the beginning
of the US earning season and release of the FED minutes from their last
meeting.

US Markets:

US Stocks advanced 3% on Monday as the euphoria felt by the
global investors about the France and Germany pledge helped the market have
their best one day performance in over six weeks. Some analyst are cautious regarding
the proposed plan citing sparse details of the plans may suggest the two
European leaders have yet to agree on major points of the plan

The Dow gained 33.06 points producing its biggest one day
point and percentage gain since August. The S&P gained 39.43 points and the
NASDAQ added 86.7 points. Financials who had been beaten up recently lead the
charge.  Tuesday will bring the first of the Q3 earnings reports with Alcoa reporting after the bell and the release of the FOMC minutes from their last meeting.

The dollar was lower against the major currency pairs
yesterday helping commodities to rise. The food commodities such as corn, wheat
and soybeans were all in the green on Monday. Traders and the markets will be
watching the crop report due out Wednesday as it may give a hint to the
direction food commodities will take for the rest of the year.

Also up on Monday Gold and Oil prices.  Gold closed up $35.00 as investor bought back
some of the precious metal they sold off in the last couple weeks for margin
call purposes.  Positive investor sentiment towards the global economy pushed oil prices up. WTI closed up $2.43 however;the price per barrel still remains under the $90.00 mark.

11

10.10.11

The View:

Investors put risk back on the table as they were finally
given some positive signs from Europe regarding stabilization of its banking
sector.

Asian Markets:

Asian Markets closed mixed in Monday trading after German
and France agreed on a plan to help support the European banking sector. The
Hang Seng Index ended up 0.2% and the Shangai Composite closed down by 0.6%.
The Nikkei was closed Monday due to holiday. The open Asian markets were
negative for most of their trading session as the markets reacted to the slew
of downgrades that came out on Friday turning positive only after the
German/French agreement had been announced. Property and Energy sectors took
the biggest hit as China cut gasoline and diesel fuel prices on Sunday. This is
first prices cuts since June 2010.  The
property firms lost ground on news the Chinese’s housing prices in September
posted their first month on month decline this year.

European Markets:

European market on Friday rallied hitting a 5 week closing
high. Investor optimism grew as a better jobs number from the US was reported and
hopefulness that Europe may be finally ramping up its efforts to help secure its
financial system.  On Friday, it seemed
the markets only want to go one direction, up, as it shrugged off news Moody
downgraded 12 of the UK banks. Moody’s cited a possibility the UK government
would let smaller banks fail.

After the closing on Friday Fitch downgraded Italy and
Spain’s sovereign debt rating causing European governments to scramble over the
weekend to shore up their financial system. Italy was downgraded only one notch
while Spain’s downgrade was two notches to double A minus. Fitch cited the intensifying
crisis in the euro zone and the expectation of the countries growth of less than
2% through 2015 for the two notch downgrade.

To help stabilize the financial system the IMF on Friday
announced a proposal it will take to the G20 meeting. Under the proposal the
IMF would provide short term credit lines to countries that would equal roughly
three times a country’s contribution to the fund. The IMF is hoping this would
help provide a stop gap measure for countries like Spain and Italy before they
turn into Greece.

European markets posted gains in their early Monday trading
session. News out of the Merkel/Sarkozy meeting over the weekend and
confirmation that Dexia would get a bailout helped calm investors jittery
nervous.  Over the weekend French President
Nicolas Sarkozy and German Chancellor Angela Merkel emerged in Berlin to announce
they had begun to discuss possible package of measures to respond to the
banking crisis causing a move to the end of the month for the Euro zone summit.
The package will be unveiled at the end of the month.  Also Dexia announced Monday that it’s board
had approved a rescue deal by Belgian. Included in the deal, the sale of the Dexia
Belgium banking division to the Belgian state for 4 Billion Euros. Along with a
guaranteed 10 years worth of funding up to 90 Billion Euros maximum.

The Euro zone received some positive economic data Monday
morning. The German trade balance showed exports grew 3.5% beating the 1.1%
estimate. Also Italy reported industrial output in Italy climbed 4.3% in
August. Both show signs that growth may not be as bad as some have predicted.
We will have to see if growth can be sustained in the next couple months to
really be able to make the determination if the news was positive.

 

US Markets:

US markets closed negative on Friday breaking a three day
winning streak.  Financial lead the way
down as the downgrade news caused worry among investors overshawdowing a good
job report.  The markets started off the
day in positive as the NFP (Non Farm Payroll) showed an increase of 130K jobs
were added in the month of August.  The
Dow declined 20.21 points, the NASDAQ lost 27.4, and the S&P fell 9.56
points.

Despite the loss in the market on Friday investor seemed to
want to put risk back on the table a bit. The 10 year yield closed just above
the 2% line however, they aren’t feeling confident enough to start buying gold
again. Friday saw gold lose $17.40.

Other commodities such as Corn, Soybean and
Wheat were all down as the dollar strengthen on Friday.

Oct 7

10.06.11

The View:

Global markets closed up as investors feel more confident in
both the global picture and European officials finally making a move to help
European banks.

Asian Markets:

Asian markets soared during their Thursday trading session
spurred by the better than expected ADP numbers from the US and European
official’s acknowledgement for a need to recapitalize European banks. The Nikkei
gained 1.7% lead by the exporters as investor sentiment improved concerning the
global picture. The Hang Seng added 5.7% as the market returned from its Wednesday
holiday.  The Shanghai is closed the rest
of the week for holiday.

European Markets:

European markets added hefty gains in its Wednesday trading
session as investors became a bit more confident European finance ministers may
take potential steps to recapitalize the European banking sector. It was
reported that European Finance ministers had discussed the need for
recapitalization. German Chancellor Angela Merkel even said Germany was
prepared to move on the subject and that recapitalization of some bank could be
justified.

The market’s positive close came despite the release of some
disappointing economic data showing the Euro zone economy had contracted in the
month of September for the first time in over two years. The report also showed
the slowdown was felt in both the services and manufacturing survey.

Wednesday’s positive close followed three consecutive days of
losses as the prospect of a Greek default increased considerable.  Retail sales across the 17 country Euro zone
also took a hit following in the Month of August driven by Germany. The market
instead decided to go with the flow from the US markets who were riding a wave
of a better than expected ADP report.

European markets were up in their Thursday morning session
as investor sentiment continued to raise that European official’s might
actually be ready to do something about European banks.  Also helping the markets was the Bank of
England’s decision to hold interest rates steady.

US Markets:

The US Markets ended in the green on Wednesday for the
second day as the ADP private sector job report the private sector added 91K
new jobs in September beating the analyst expectation on 70K. The Dow added
131.34, the NASDAQ added 55.69 points and the S&P added 20.09 points. Still
investors and traders questions if the fundamentals are really there to keep
the rally going or if this are another case of chasing gains.

With the potential of a brighter jobs picture commodities
also rallied on Wednesday. Oil was higher caused by inventory numbers coming in
lower than expected.

Oct 5

The View:

Volatility continues across all global markets as investors contemplate the effects of the Euro zone not making any substantial progress toward solving the Euro zone’s sovereign debt issues.

 Asian Markets:

Asian markets closed mixed on Wednesday after a choppy trading session. Investors remained cautious about the euro-zone debt issue as they reacted to the news Moody’s downgraded Italian sovereign debt. Dragging on the markets shares of Apple which sold off as the new I- phone model rolled out at Tuesday’s news conference wasn’t the much-anticipated version 5. The Nikkei closed lower down 0.9% while the Shanghai and Hang Seng were closed for a mainland China holidays.

European Markets:

European Markets continued their downward plunge as investor’s continue to speculate what effects the continuing Greek debt problems will cause throughout the European banking system. Some analyst has even started to speculate that issues caused by Greek debt could cause a global double dip recession.

Stocks that were sensitive to the economy such as banks, autos and basic resources led the declines. Bank stocks continued to be hard hit as Dexia bank shares fell 37% during Tuesday’s session as the bank admitted it is facing structural problems and could breaking up. All of this after Monday’s announcement by Moody’s that the bank is under reviews for a possible downgrade due to funding issue caused by difficult conditions in the current credit markets. Investors became increasingly jittery after euro-zone ministers said they will be delaying the decision on whether Greece would be receiving its next tranche of bailout funds. Stocks did close of their lows as the markets erased a small amount of losses after FED chairman Bernanke hinted in his testimony before the US Congress the Fed was prepared to step and help the economy. European shares opened higher in their Wednesday morning trading session. European banks led the way on news the EU finance ministers meeting were looking into a coordinated move to recapitalize Euro zone banks.

US Markets:

The US Markets closed up Tuesday as investors furiously covered their short positions after the FT (Financial Times) reported EU finance ministers have added the topic of re-capitalizing of European banks to their discussions. Also adding to the fury a report from the WSJ (Wall Street Journal) France and Belgium were in bailout talks with the sovereign debt laden, Dexia bank, to create a bad bank to house all its bad or risky loans taking them off their balance sheet. Eventually the bad bank will be sold or taken over by France and Belgium. This would be the first bailout of a European bank in the euro zone debt crisis.

The Dow, who had been down by 250 points earlier in its trading session gained over 400 points to end positive 153 points. The S&P 500 ended its trading session up 2.25% or 24.72 points and the tech heavy Nasdaq ended up nearly 68.99 points or 3% despite Apple shares losing some ground as investor were disappointed the big announcement today did not include the I-phone 5.

The Markets were down most of the day as worst then expected economic news was released by the US. Markets began to see a small rally mid-day after Fed Reserve Ben Bernanke reassured investors the Fed was still prepared to take additional steps to help out the fragile economy. Most analysts agree this push to the positive was based more on short covering then on actually fundamental. In other words investors should get their hopes up for the beginning of a rally.

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