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
Why Most Investors LOST Money by Investing in ARK FUNDS - 27th Jan 22
The “play-to-earn” trend taking the crypto world by storm - 27th Jan 22
Quantum AI Stocks Investing Priority - 26th Jan 22
Is Everyone Going To Be Right About This Stocks Bear Market?- 26th Jan 22
Stock Market Glass Half Empty or Half Full? - 26th Jan 22
Stock Market Quoted As Saying 'The Reports Of My Demise Are Greatly Exaggerated' - 26th Jan 22
The Synthetic Dividend Option To Generate Profits - 26th Jan 22
The Beginner's Guide to Credit Repair - 26th Jan 22
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Taking Profits On The China Stock Market Growth Trade

Stock-Markets / Financial Markets 2009 Jun 04, 2009 - 06:04 AM GMT

By: PaddyPowerTrader


Best Financial Markets Analysis ArticleStocks pared losses as the Dow finishes down 64 points yesterday having dipped to minus 142 points earlier as investors and traders took profits on the “China growth play” i.e. there was notable selling of commodity, metals, oil, & mining shares.

So we sit at major resistance levels after a 3 month government induced rally, (with the biggest fiscal stimulus packages and bailouts of all time and free money for banks) waiting on a new white knight or catalyst. Because of the earnings game, the stock market has turned into a “one quarter at a time” game. You might own the best stock in the world with the best long-term outlook, but if they miss and guide down you’re bleeding red. Until earnings ramp up in a few months it’s hard to find a good positive catalyst to cling onto.

Today’s Market Movers

  • Bernanke’s message in the testimony itself was orthodox. He recognises that the rises in rates “appear to reflect concerns about large federal deficits but also other causes, including greater optimism about the economic outlook, a reversal of flight-to-quality flows and technical factors related to the hedging of mortgage holdings.” This suggests confidence that the monetary accommodation can be unwound in time, and that the Fed will not be tempted into monetising debt. But the Chairman could have been still more forceful. He will not have quelled market much.
  • Note that the European Stoxx 600 is now valued at 25.5 times earnings, it’s most expensive level since 2004. Contrast this with a very interesting Bloomberg news story that predicts European companies will reduce dividends over the next 18 months at the fastest rate since at least 1999 and you have reasons to be cautious at these lofty levels.
  • In exploration news Dragon Oil has reported that oil flowed at an initial rate of 3,554 bopd from a new development well on its licence offshore Turkmenistan. This rate is more or less in line with expectations. This is the second of eight development wells planned by Dragon for 2009. Management is targeting an annual average growth rate of 15% in daily production for the period 2009-2011.
  • Meanwhile, UK food retailers Sainsbury and Morrision’s are up this morning after the latter posted a positive sales update and the former was upgraded by Morgan Stanley.
  • Despite the parade of the blondes over the weekend little old Latvia remains mired in a deep depression and couldn’t even sell any bond debt yesterday. Inconsequential you may think, but a devaluation of the lat would weigh heavily on other Central , Baltic and Eastern European countries (particularly Hungary and Romania whose currencies are perceived to be overvalued) and put additional pressure on the banking systems in Sweden and Austria who have large exposures to these countries. With globalization read contagion.

Tullow Steps Up The Search For A Partner
According to media sources, Tullow Oil is looking to sell 50% of its stake in the Ugandan Oil Fields in order to achieve optimum production. Chief Executive of Tullow, Aidan Heavey stated that Tullow was looking at bringing in a partner to fund the pipeline.

He said exploration companies rarely take 100% of any licence or interest and usually bring in partners. For Uganda, Tullow decided to keep full ownership in order to move quickly through the exploration phase. Tullow’s partner in Uganda, Heritage Oil said yesterday that it was in preliminary talks that may lead to a possible merger.

If completed, the deal would be “treated as a reverse takeover.

Bank Of Ireland Gains Strength
Bank of Ireland whose share price has tripled in the last five weeks yesterday announced the completion of its tender offer for four separate securities, paying out a combined €520m for paper with a nominal value of €1.26bn. This will generate a gain of €740m pre-tax. When account is taken of likely gains on two further dollar-denominated securities, the bank is confident of generating an equity gain (i.e. after tax) of €1bn. the bank has more generally benefited from positive sentiment due to better capital levels and margins plus of course the receding threat on nationalization. There is even talk of a rights issue later in the year to repay the government.

Five stocks that have prospered during the great recession

Here is the problem for many mortgage holders and homeowners today

Data Ahead Today

  • Euro area retail sales, Apr (10:00 BST): Sales should continue to shrink, down 0.2% in the month
  • BoE interest rate decision (at Noon): Rates should be left at 0.5% and I do not expect further commitments on asset purchases.
  • The statement might emphasise bank lending and MPC perceptions that credit supply strains are intensifying would be taken as a signal of a further Quantitative Easing extension in subsequent months (up to the initial limit of GBP150b, with increased risk that the BoE asks Treasury to exceed the current cap).
  • ECB interest rate decision (12:45 BST): Rates should remain on hold at 1%, with no decision on a refinancing floor.
  • The Covered Bond purchase programme should amount to EUR60b, probably commencing in the next few weeks, with the door kept open to future increases.
  • The ECB should announce the list of eligible bonds, but there’ll probably be no primary market purchases because they might conflict with the Treaty.
  • New forecasts should include a largely anticipated and significant downward revision for 2009 GDP.

And finally….one for the road

Disclosures = None

By The Mole

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 - 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