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Week ended 12/03/2010 -- Markets this week

First some Performance reports  ---
Decline in Euro-zone industrial confidence plus decline in Uk’s money supply.
Some good news from China as there purchasing manger’s index roses  & also their manufacturing expanded.
In USA the home price declined, now this is more bad news not only for economy but also for under water mortgage holders because it is only increasing the gap between the outstanding mortgage & current market value of these homes.
House-hold purchase & the number of contracts to buy previously owned houses  increases, these are  few improvements.
Payrolls increase is less than projections.
Unemployment rate roses to 9.8% in November, in figure it is almost 15million, highest since April.

Let’s see the markets this week ----
Index
Week ended Dec3
       (%)

Week ended Nov 26





OIL  (jan)
89.19
6.50%

2.75%





GOLD (jan)
1406
3.15%

0.75%





DOW
11382
2.61%

-1.00%





LONDON
5745
1.36%

-1.12%





BRAZIL
69766
2.26%

-3.77%





JAPAN
10178
1.38%

0.17%





INDONESIA
3696
1.48%

-2.23%





CHINA
2842
-1.01%

-0.60%





INDIA
19966
4.34%

-2.30%


ECB in future may consider to increase the size of 750 billion EURO fund. ECB is helping weak euro countries by purchasing the govt- bond of those countries. Interest rate in Euro zone  is remain unchanged & may remain unchanged up to 2011. Rising Euro zone bond’s spread is deciding to certain portion the movement of EURO.
In this moment one big concern for China is the liquidity in the economy & the CPI which is 4.4%, highest in almost 2 years. Last month PBOC sold 1 billion YUAN  bond, it’s yield was many basis point low from bond of similar maturity.

China is the world’s largest producer & in the 2nd spot in terms of using gold. Gold account for 1.6% of it’s  reserve of PBOC. Now china must like to increase this % when compare comes to Germany & USA. This year their  gold import already increases many times compare to last year.
India , China , Russia , many other south Asian nations as well as Middle east nations have increase their gold  buying. Most interesting  is  the central banks which are buying gold in this high price from IMF.
In this moment  EURO is decreasing against US$, so many people are looking in this EURO-GOLD relation to invest in gold, as gold is better hedging for any sudden crash.
Gold yet couldn’t cross it’s recent previous high 1425 which can be the target in coming days.

China has a huge reserve of EURO, now if EURO falls as some experts are saying that it may be at par with US$ or may be even less than that, then will not China be facing a huge risk ?  Now China will handle this issue very carefully , it will not let it go.
As we saw few months ago that China assured Greece of doing more trade with them, this is purely a step to save their reserve.
In Currency market  $1.428 is a crucial level for EURO if it breaks it then we can see some positive thing for EURO otherwise there is a risk of downside. Though no patter has formed yet but there is a chance.


Sometimes ago there was a scope of Aussie-dollar be par with  USA$ but  it is looking fear of  inflation and there by increase in interest rate is delaying  this program  for now.
Coming days will say which way USD will be going. Because already started to decline from it’s high.

Venezuelan Oil & Energy minister said that world economy can handle the oil price at 100$/barrel.
This week oil just moves in one direction that is only in up, it crosses it’s previous high $89.10/barrel and closes at $89.19/barrel. Short-term correction is due in oil.

The yield of south-east Asian nation’s  5 years Sukuk  has dropped  &  MOODY’s says they may raise Indonesia’s rating on growth and improvement debt level. Malaysia, third largest economy in south-Asia may see an increase in their budgetary deficit compare to 2009, but it’s economy may expand.

In India GDP rate is up 8.9%, strong  farm production, increased vehicle sales and improvements in bank lending e.t.c. help this growth rate. There is also rise  in HSBC’s Purchasing Manager’s Index.
Indian govt is unloading (already did some of it’s ) shares of different companies such as coal India, MOIL, SCI e.t.c. Foreign investors are putting lot of funds in this sales that is going around. Some organization was calculating that half of the investment flows in Asia have gone to India.
Country’s Merchandise exports rose faster than imports in October first time in 3 years. But the concern is trade deficit which is widened to $9.7 billion in October & also the CPI ( better say food & fuel ) which is getting hard to control.

Markets in coming weeks
Dow is again going high but  this move of upward can be a good one if it breaks  11452  and carry on with further move. The way NIKKEI is moving it may break its April high. T-SEC is in over-bought condition because it already broke its January high. For FTSE breaking of 5800 is crucial.  Germany is in better economic condition it’s economy is going near to full employment, manufacturing & export condition is quite good so all these is reflecting in its  DAX index, but it needs some correction in fact lot. Chinese market has the opportunity to go up but all depends on the economic issues.




After all those correction coming days is very critical, it is very immature to predict the movements of these indexes in coming weeks, my first impression says it may be side way movements for few days because as those correction are not a crash, looks like market is getting fuel for further movement in either direction. I think in this moment it is economic matters those are guiding the stock markets. Definitely some stocks were very cheap as I was also saying this in my last writing. People who able to buy those stock at recent low level, already make short-term profits. Sometime I feel market is not moving naturally, it is taking some steps forcefully and it it is true that there is some big danger in coming days, weeks or in months, indeed very big danger. Somewhere I was reading that one customer is holding a big portion of LME Copper stocks, if it is true then we are going to see some action in copper related companies in coming days.







NOTE :  Please see the disclaimer below this blog. 

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