Archive: November, 2009

Maybe just a small blip in dollar’s downward slide but definitely worth noticing. The dollar on Tuesday  rebounded from its 15 month low on Monday. Looks like Federal Reserve Chairman Ben Bernanke comment in favour of strong dollar helped the currency as traders trimmed longer-term bets against the currency. On Monday Bernanke commented that the Fed is very much looking into the implications of changes in the value of dollar as US interest rates reach rock bottom levels. This was interpreted by traders as an indication that the Fed is worried about the current depreciation which can increase inflation in the economy. European Central Bank President Jean-Claude also came in support of the dollar. He clearly mentioned that a strong dollar is in the U.S. interest and that there are no plans for euro to act as a reserve currency in the near future. The impact of this interpretation was  [...]

Stocks on Tuesday closed marginally higher than the Monday level as the day saw both highs and lows. Finally the stocks closed at 13 month high for the second consecutive day thanks to commodity linked shares that offset the decline in retail shares. The Dow increased by about 30 points(0.3%) to end the day at 10,437.42 points. The S&P 500 increased marginally by 1 points to close just above the 1,100 level. The Nasdaq composite increased by 0.3% to close at 2,203.78. Since October 2008 all these three indexes are currently at their highest level. The sectors which gained on Tuesday included Materials (gain of 0.9%), Telecom (gain of 0.6%), Tech (gain of 0.5%), Consumer Staples (gain of 0.2%), Financials (gain of 0.1%) and Health Care (gain of 0.1%). Consumer discretionary and Utilities registered a decline of 0.7% and 0.4% respectively. Industrials and Energy stocks closed the  [...]

Emerging Asia The recovery is very much underway in this region with growth impetus being provided by the fiscal stimuli and accommodative monetary policy. Unemployment is on decline in this region with inflation gradually moving into the positive territory though in the majority of economies it is still negative. China in particular had a wonderful quarter with the real GDP growing by 8.9% in the third quarter of 2009. Overall in the current year GDP in china has grown by 7.7% year on year. Growth has mainly been driven by fiscal stimulus as can be seen from the 7.3% contribution of stimulus driven fixed investment to annual GDP growth in the first three quarters of 2009. The positive consumer sentiment was evident from a robust 4% contribution from consumption to GDP growth in the first three quarters of 2009. Trade surplus though still at high level however continued to decline in  [...]

Lot of factors were responsible for dollar’s downward slide on Monday. Like before Fed Chairman Ben Bernanke’s comment that interest rates will continue to be low as the economy shows some signs of recovery was the most important factor in pulling the dollar down. Also lack of agreement between Asian and US leaders on currencies was taken as a signal by traders to sell the dollar. The United States and China leaders had met at the Asia Pacific Economic Cooperation (APEC) forum in Singapore to discuss currencies. However they failed to come to an agreement which was taken by traders as an indication that the dollar’s downward trend will continue and that the US interest rates will continue to be low while interest rates in other countries may eventually increase. In search of better return investors normally transfer funds to an economy with higher interest rates. Other economies  [...]

Stock markets reached new high on Monday on the back of weak US dollar and Fed chairman Ben Bernanke comment that the interest rate will continue to be low as the economy recovers. Dow increased by 136 points(1.3%) to close at 10,406.96 points which is the highest level since October 2008. S&P increased by 15.8 points(1.8%) to end at 1,100 points. The Nasdaq increased by 30 points (1.4%) to close at 2,197.5 points. Energy and Material stock gained the maximum in Monday’s rally with both of them increasing by 2.5% and 2.3% respectively. Commodity prices were helped by weak dollar with gold and oil in particular gaining. Crude oil prices increased by 3.4% to close at $78.94 per barrel. Gold touched another record high of $1143.40 per ounce before finally settling down at $1139.20 per ounce recording a gain of 2%. The other advancing sectors on Monday includes Industrials (gain of  [...]

Euro-zone Helped mainly by government initiatives the Euro zone seems to be firmly on growth path. Germany and France in particular are showing promising growth. Factory orders in Germany increased by 2.7% month on month in September as against the forecasted decline of 1%. Industrial production in Germany also increased by 2.7% month on month in September. Overall for the quarter the industrial production has increased by 3.5%. As per estimates German GDP is expected to increase in the range of 0.5% to 1.0%. In the second quarter German GDP posted a growth of 0.3%.  Growing exports has also helped the German economy increasing by 3.8% month on month as per data from German Statistics office. Unlike Germany French economy did not have such a good run with its industrial production declining by 1.5% month on month as against the forecasted increase of 0.5%. Overall at the growth level  [...]

Japan The Asian giant is also on a recovery path with the economic activity recovering since the second quarter of 2009. The recovery has been mainly export driven which to a certain degree is a positive news as it indicates that other economies are also experiencing recovery. Industrial production continued to increase for the seventh consecutive month in September registering an increase of 1.4% month on month. However with weaker labour market and not much of corporate profit domestic private demand continues to be weak. Thanks to fuel and energy prices, inflation in Japan continues to be negative. Annual CPI at -2.2% was unchanged in September. Excluding food and energy annual CPI decreased to -1.0% from -0.9% in August. There are still challenges abound for the economy. With an export driven growth, Japan is to a large extent dependant on other economies for its growth. Exports  [...]

Latest indicators indicate that the world economy is on a recovery path.  The purchasing Manager’s index was at its highest level in October in more than three years clearly indicating that the economic activity has picked at a higher rate than before. Also the expansion of economic activity in October was broad based and strong in a number of advanced economies. USA The world’s big Sam is finally on recovery path with the economic activity expanding in the third quarter of 2009 after the consequent falls in the earlier two quarters. As per BEA estimates third quarter registered a growth of 3.5% in annualised terms in real GDP. This is definitely some good news given the fact that the last four quarters had negative growth. With the economy picking up momentum there has been gains in consumer spending. Private demand particularly for motor vehicle sales was helped by the government  [...]

The inevitable finally happened. After a six day rally US stock markets saw a decline on Thursday. The Dow declined by 94 points (0.9%) to end at 10,197.47 points. Other indices like the S&P and Nasdaq Composite also registered a decline. S&P declined by 11 points (1%) to close at 1,087.24, and the Nasdaq composite declined by 18 points (0.8%), to end at 2,149.02. The Dow had earlier increased by more than 500 points (5.3%) to reach 13-month high. All sectors registered a decline with the energy and financial stocks registering the maximum decline. Energy sectors declined on the background of lower oil prices which declined by 3% to settle at $76.91 per barrel. The other declining sectors include Financials (down by 1.8%), Utilities (down by 1.3%), Industrials (down by 1.0%), Consumer Discretionary (down by 1.0%), Telecom (down by 0.8%), Materials (down by 0.6%), Health Care (down  [...]