Analysis Topic: Stock & Financial Markets
The analysis published under this topic are as follows.
Saturday, March 17, 2007
The Yen Carry Trade, Mortgages and Fingers of US Housing Instability / Stock-Markets / Yen Carry Trade
By: John_Mauldin
This week we look at the yen carry trade, delve deeper into the mortgage lending world, and see if we can find a possible connection between them and the economy in general through something called complexity theory. As I have written for many months, I think the subprime mortgage problems are going to be the catalyst for a recession. We look at some ways that the contagion in this small part of the housing market could spread.
Bubbles have consequences far beyond their causes when they burst. That is because they encourage irrational behavior and expectations not just in the asset that is rising in price, but in surrounding areas. As an example, remember the internet bubble? There were 350 internet stocks at the end of 1999, comprising a mere 6% of the market cap of total US equities. But the NASDAQ dropped by over 70%. The damage was not confined to just internet stocks.
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Friday, March 16, 2007
Stock Market Relative Strength Analysis Suggest More Falls in Share Prices / Stock-Markets / US Stock Markets
By: Marty_Chenard
We don't show this chart very often, but one on the things that our paid subscribers see every morning before the market opens is our Ratio of the % of Stocks with Upward Strength vs. the % with Downward Weakness.
Every night, we run a strength measuring analysis of all the stocks on all the indexes ... on over 8,000 stocks. This is a measurement of the broad market for every stock with a value over $2.00.
Why is this important?
Very simply ... a market that is rallying up has more stocks trending up than down, so its ratio is a positive number. The higher the ratio number is, the stronger the rally gets. The opposite is also true ... when the Ratio is negative, then there are more stocks in a down trend compared to those in an up trend, and therefore the market trends down.
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Thursday, March 15, 2007
US Utilities Analysis - The Greed Factor / Stock-Markets / US Utilities
By: Roger_Conrad
“Greed is good,” says Michael Douglas' Gordon Gekko in Oliver Stone's cult classic, Wall Street. Undeniably, the world's financial markets are based on self-interest, which is why they work so well moving capital around the globe. Money will only go where it can be used profitably--that is, filling a need and thereby increasing the world's wealth.
Markets work best, however, when the self-interest driving them is enlightened. In other words, there's a huge difference between decisions made solely to grab a big payday and those based on sound business principles.
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Thursday, March 15, 2007
Investing in Malaysia and my take on the Stock Market Falls / Stock-Markets / Emerging Markets
By: Money_and_Markets
I'm writing to you from the 33rd floor of the Kuala Lumpur Hilton, in the capital and largest city of Malaysia. One of three main Malaysian territories, metropolitan Kuala Lumpur is home to 6.9 million of Malaysia's 26.6 million citizens.
I've been here in the city, which locals call “KL,” for three days. Let me sum up what I've observed: KL, and Malaysia in general, are hotter than hot! And I don't mean just the weather, which is 97 degrees and humid. I'm talking about the country's economy.
Chic, vibrant, youthful, exciting, buzzing — those are just some of the words I'd use to describe the scene here. Like other Asian cities, KL is a melting pot. There are people of original Malay descent, along with Chinese, Indians, and other indigenous ethnic backgrounds.
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Tuesday, March 13, 2007
The Corrective Rally is over as the Stock Markets tumble on more Subprime bad news / Stock-Markets / Global Stock Markets
By: Nadeem_Walayat
More subprime bad news hit the Dow as it closed down 242 points at 12,075, dragging the FTSE lower to 6161, which had earlier in the day rallied strongly to 6276. The sell off had started in Asia with many indices down between .5% and 1%.
The continuing, and one could say expected bad news from the US Housing market was from the US Mortgage Bankers' Association survey which showed that 0.54% of all loans began the foreclosure process in Q4 of 2006, the highest in the organisation's 37 year history of recording such statistics. This news again raised the strong possibility of the US going into recession later this year.
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Tuesday, March 13, 2007
Nolte Notes - Volume Signals Stock Market Correction to Resume / Stock-Markets / US Stock Markets
By: Paul_J_Nolte
The growing and contracting economy seems to be growing again, after it was brink of collapse just last week. China and sub-prime lending were going to be the ruin of our economy; today they are contained and are an issue for merely a few. The employment report was better than expected (housing hasn't hurt job gains) and trade has improved some (although not with China ). Interest rates went from forecasting cuts fairly soon, to once again flattening out, and discussions about rate increases are back in vogue. Starting with employment – although the gains were better and revisions to historical data were higher, the fact is the average payroll gains this year is substantially behind the average gains of last year, so they are definitely slowing.Read full article... Read full article...
Tuesday, March 13, 2007
Rise of the (Selling) Machines - Threat of Automated Trading to the Financial Markets / Stock-Markets / Financial Markets
By: Michael_J_Panzner
In the popular 1984 film, The Terminator , current California governor and former actor Arnold Schwarzenegger plays a cyborg sent back in time to eliminate the mother of future leader John Connor before he could be born. Single-minded and highly developed, the robotic killer relentlessly pursues his intended prey throughout the movie, despite strong resistance fromF the hero's supporters, although the good guys eventually win out in the end.
While the story is pure fantasy, some may not realize that in the stock market there are the equivalent of dangerous man-made automatons lurking in every corner. Often technology-based, they are powerful, sophisticated, and difficult to keep under complete control. Yet they are exerting a growing and pervasive influence on prices. Unfortunately, these potential share-price assassins, if they were to be suddenly unleashed all at once, represent a Terminator-like threat to financial markets, especially if conditions are just right.
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Monday, March 12, 2007
In depth Market Wrap - US Economy and Financial Markets / Stock-Markets / Financial Markets
By: Douglas_V_Gnazzo
The Economy : Jobs
The economy added 97,000 jobs in February, which was below last month's 146,000 increase. The employment rate fell to 4.5% from 4.6%.
Employers in the U.S. added 97,000 jobs last month, less than in the prior month, as a slowing housing market and the return of winter weather prompted job cuts in construction. The unemployment rate fell.
Construction reported the largest loss of jobs in 15 years, reflecting the weakness in the housing and real estate markets. Builders let go off 62,000 workers.
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Monday, March 12, 2007
Financial Markets Sell-off Fundamentals, Two Weeks Later / Stock-Markets / Liquidity Bubble
By: Michael_Pento
Nearly two weeks removed from the “scary” 500 point Dow drop, Wall St. Strategists have been correct thus far in saying the slide had nothing to do with foreign central banks dumping U.S. treasuries—that's not a problem yet . However, it should be clear that the decline has everything to do with the gradual contraction of global liquidity imposed by central bankers from the globe's fastest growing economies.
Central banks in China and Japan made moves to tighten liquidity and curtail the rampant growth in their money supplies-- with rumors from India that it may join in the squeeze. Gold's fall in the immediate aftermath was a validation of this view. To be clear, any deflationary trend will be slight and temporal in nature and I maintain my secular view that the trend towards rampant global inflation is still intact. However, it would be foolish to ignore the affect this liquidity squeeze will have on most markets, including gold.
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Sunday, March 11, 2007
Stock & Commodity Markets Elliott Wave Analysis - 11th March 07 - The Magic Number / Stock-Markets / Elliott Wave Theory
By: Dominick
I'm sure there were readers who couldn't understand the bullish tone from last week's update after the S&P closed on the lows that Friday and looked as if it was about to fall off a cliff. There was plenty of talk last weekend of a “running flat” second wave.
Such a pattern is when the underlying trend is so strong that it overwhelms the correction and, in a decline, wave c is unable to exceed the peak of wave a. Monday's gap down should have ensured the doubters that this was in fact the correct pattern and that the trap door had been opened for the third of a third … again .
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Sunday, March 11, 2007
August 2006 Again ? Financial Markets Forecast into August 2007 / Stock-Markets / Technical Analysis
By: Boris_Chikvashvili
What is seen here is the quantum energy function of the SPX future. This is a proprietary function based on the principles of Quantum Physics.
We believe that Yen carry trade is not completely unraveled yet and it will produce retest of the recent lows, which would on April 7, neatly correspond to the lows on the chart. Then we will have then the rally back into early May, just like in 2006 and then down into August. Looks like the creator wants to repeat the play of the last year. So, be ready.
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Sunday, March 11, 2007
Stock Market 4 Year Cycle Low - Next Leg of the Downtrend Expected / Stock-Markets / Cycles Analysis
By: Tim_Wood
As the market advanced up out of the June/July 2006 low, many began proclaiming those lows as having marked the 4-year cycle low. With the last obvious 4-year cycle low having occurred on October 10, 2002 at 7,197.49 and when the October 2006 low that most were expecting did not occur, most pointed at the June/July lows as having marked the 4-year cycle low. I can understand why on the surface most people would have thought this. But, that was the easy answer for the market not making the low in October that so many were expecting.Read full article... Read full article...
Sunday, March 11, 2007
Weekly Financial Markets Review -The Corrective Rally Continues - The Worst is Not Over ! / Stock-Markets / Financial Markets
By: Nadeem_Walayat
The week saw the Stock Markets rally, the Dow ended up at 12,276, FTSE 100 index at 6246. The asian stock markets, including China also rallied. In our analysis immediately following China's mini crash, I suggested that the Stock Markets would make a bottom during the week and start to rally towards targets of 12,525 for the Dow Jones and 6300 for the FTSE. Following which another down leg would begin. Stock Markets follow China Lower - What to expect next as China's crash continues in Asia 27th Feb 07.
Back to the week that was -
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Saturday, March 10, 2007
Weekly Stock Market Technical Analysis Report - 10th Mar 07 / Stock-Markets / US Stock Markets
By: Mike_Burk
The good news is: New lows which hit 106 on the NYSE and 159 on the NASDAQ last Monday declined to 23 on the NYSE and 58 on the NASDAQ on Friday.
Short Term
New lows will reveal the short term condition of the market, but, for now, the picture is unclear.
Saturday, March 10, 2007
Unwinding the Yen carry Trade and its Effect on the Financial Markets / Stock-Markets / Yen Carry Trade
By: Adam_Oliensis
Two weeks ago I wrote:
I suspect that in the context of an inverted yield curve (and especially of a steepening inversion) the market's PE is unlikely to continue to expand as it has since last summer. Note that since '03 there has been a strong correlation between the sinking market PE and the flattening (and then inverting) yield curve. At present PE is rising as the trend in the yield curve resists doing likewise. I continue to suspect that that divergence is unsustainable.
The above was written in reference to the following chart when the market PE (blue line) was peaking at 15.2. It has since sunk (abruptly) to 14.5.
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Friday, March 09, 2007
Stock Market Rallies after last weeks slump - The Worst is Far from Over! / Stock-Markets / Financial Markets
By: Peter_Schiff
With today's relatively benign jobs report coming in close to the consensus forecast and with the stock market comfortably above Monday's low, most on Wall Street are breathing a sigh of relief. The popular position is that last week's turmoil was simply a speed bump on the road to greater prosperity, and that a recession and a bear market are low probability events. As you may imagine, I beg to differ.
Friday, March 09, 2007
Stock Market Analysis - A Major Crash...or a Major Bottom? / Stock-Markets / US Stock Markets
By: Clif_Droke
On Tuesday, Feb. 27, the stock market experienced its biggest 1-day tumble since 2001. That it created quite an impression on the minds of millions of investors is undisputed. What is disputed, though, is whether this sharp decline represented a needed correction of an ongoing intermediate-term bull market...or perhaps the start of a major bear market?
The debate continues with everyone having a different take on the matter. But the market itself is giving clear and decisive readings as to which side of the argument is likely correct.
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Thursday, March 08, 2007
Another Potential Crisis for Investors - Israel Plans to Attack Iran’s Nuclear Facilities / Stock-Markets / Iran
By: Money_and_Markets
There's a heck of a lot happening right now! The markets have been volatile, so I want to give you a quick update on where I see things heading next. And I also want to tell you about a looming threat that many investors are still ignoring. Let me get right to it ...
First, with rare exceptions, my indicators on the U.S. markets are turning south. It appears that my warnings are coming to pass — investors are finally starting to notice weak real estate markets, too much debt in the country, peaking corporate earnings, and the weak dollar. So don't be surprised one iota if U.S. stock markets start to yo-yo like crazy, or even fall sharply.
Second, in direct contrast to the U.S., and despite all the scary things you're hearing, Asia is booming . There's been no change in the spectacular fundamentals underlying China, India, Singapore, Vietnam, Malaysia, or Indonesia. All of these countries are exploding with economic growth. Their stock markets, while a bit more volatile right now, are in strong long-term bull markets .
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Thursday, March 08, 2007
Subprime mortgages hit Banking sector and likely to lead to further Stock Market Falls / Stock-Markets / US Housing
By: Marty_Chenard
Let's look at a 3 year picture of the S&P 500 versus the Banking Index today.
Why is it important to look at the Banking Index at this time?
The answer is, "because of mortgages, the home building industry, and a credit contraction."
First, the home building industry caved in, but our economy seemed unaffected.
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Thursday, March 08, 2007
Paulson downplays Stock Market worries - Despite Yen carry trade warnings / Stock-Markets / Yen Carry Trade
By: Mike_Whitney
Hank Paulson is sweating bullets right now.In fact, a shrewd investor could probably make a fortune just figuring out what type of high-blood pressure medication he's on and then betting the farm on the manufacturer.
Last week the stock market bull plopped down on an I.E.D. and wound up in intensive-care sucking food from a straw and drifting in and out of consciousness. That put Paulson on the road to South Korea, Japan and China where he'll meet up with his foreign counterparts to strategize on the deteriorating state of world markets. It's a daunting task. The sudden rise in the yen has set off a brushfire that's swept through the global system clearing out the dead-wood and sending panicky fund managers out onto the streets.
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