Jan 17, 2010

Daily Markets - Financial News & Opinions

Daily Markets - Financial News & Opinions

Stocks Weaken On JPMorgan’s Disappointing Revenues; US Dollar Rallies

Posted: 17 Jan 2010 04:13 AM PST

DailyMarkets.com (New York) - The second trading week of the new year saw weakness in the US stock markets. The S&P fell 0.8% and Nasdaq declined 1.3% for the week. JPMorgan (JPM), regarded as one of the strongest US banks, reported disappointing fourth-quarter revenues. It gave a warning to investors, saying that it was too soon to tell if losses on mortgages and other loans have reached a peak.

Other financial stocks were affected by the weakness in JPMorgan’s consumer business, … [visit site to read more]


Pimco’s El-Erian: Markets Not Facing Reality Of Slow Economy

Posted: 17 Jan 2010 12:01 AM PST

Financial markets have failed to price in the remaining problems that bedevil a long-term economic recovery, Pimco’s Mohamed El-Erian told CNBC.
“You come to the conclusion that the market simply hasn’t priced in the reality of what we talk about every single day,” said El-Erian, who helps run the world’s largest bond fund.
“What you’re getting is a recovery phase, a healing phase that was artificially created,” he said. “The history of crises is very clear. They expose structural … [visit site to read more]

Mark Mobius On Emerging Market Valuations

Posted: 16 Jan 2010 07:01 PM PST

I yesterday published a short post entitled Earnings into focus, dealing with stock market valuations in the US. But what about emerging market valuations? The following comments have just been received from Mark Mobius, Templeton Asset Management’s emerging markets guru:

Many investors are now concerned about the 'high’ price/earnings (P/E) ratios in emerging markets given the rally last year. I agree that the P/Es have risen but I think that they have done so from a very low … [visit site to read more]

Beyond The Statistics

Posted: 16 Jan 2010 06:03 PM PST

Several of the quotes featured in “‘I’ll Know the Recession Is Over When …,’” which appears in this month’s AARP Bulletin, are somewhat tongue-in-cheek. Nonetheless, they serve to highlight two things: the fact that the current downturn has affected a broad cross-section of Americans in many different ways; and, the shortcomings of the statistics that the so-called experts are so keenly focused on:

While some experts may see a "green soup," many Americans see the pot … [visit site to read more]

Despite The Market’s Reaction, Both Intel And JPMorgan’s Earnings Results Were Exceptional

Posted: 16 Jan 2010 05:26 PM PST

Stock market bellwethers Intel Corp. (INTC) and JPMorgan Chase & Co. (JPM) gave earnings season a booster shot Friday when they released fourth-quarter results that exceeded analysts’ expectations.

And even though the market reacted negatively to the news - suffering its worst losses of the New Year - their results add positive momentum to an earnings season that is expected to provide an abundance of good news.

For the first time since the second quarter of 2007, fourth quarter … [visit site to read more]

Chile’s Economic Miracle: Free Trade Lessons

Posted: 16 Jan 2010 05:11 PM PST

The chart above helps to document graphically what has accurately been described as the “Chile economic miracle.” Up until the early 1980s, when the first round of economic reforms (1974-1983) were starting to have a positive effect, Chile’s economic performance was among the weakest of the Latin American countries, with annual increases of real GDP per capita averaging only 0.76 percent from 1913 to 1983. Additional economic reforms in 1985 and 1990 that included trade liberalization … [visit site to read more]

The Week Ahead: Leading Indicators Should Show US Recovery Will Continue In The Months Ahead

Posted: 16 Jan 2010 05:01 PM PST

NAHB housing market index (Wednesday 20) - Notwithstanding the improvement over recent months, the real estate sector remains very weak. This was reflected in the NAHB housing market index, which fell from 17 to 16 in December. With the labour market failing to reverse the negative trend of the last two years and foreclosures expected to rise in the months to come, we do not expect a rebound in the real estate sector over the short term. The NAHB housing market index is likely to remain … [visit site to read more]

Economic Events For The Trading Week January 17 - 22

Posted: 16 Jan 2010 04:01 PM PST

The Martin Luther King Jr. holiday-shortened week ahead will be light on U.S. economic reports but crucial data from China will provide an insight to the inflation conditions, economic activity and growth of the current leader of the world’s economic rebound.

In preparation for the new trading week, here is a quick look at the most important economic events that every currency trader should pay attention to.

Sunday, Jan. 17 will start the trading session with a notable report- the … [visit site to read more]

For Your Perspective, In 2009 Britain Has Sharpest Rate Of Decline In 88 Years

Posted: 16 Jan 2010 11:00 AM PST

Falling far short of expectations, Britain's economy didn't strengthen much in the fourth quarter. So, for the whole year its GDP remained down 4.8 percent. It was the largest contraction the country has experienced since 1921.
According to the Times Online:
"Most economists had expected the country to turn the corner in the third quarter of the year, the three months to the end of September.
"But official figures shocked economists by showing that the economy was still in recession, … [visit site to read more]

Equity Case Comparison

Posted: 16 Jan 2010 10:27 AM PST

Below is a excerpt from Lakewood-Views providing a good case comparison for a bearish stance on equities.

From Lakewood-Views:
Some times you have to look beyond the numbers and conduct case comparisons. This is especially appropriate if you are looking at business cycles because we just do not have that many occurrences of recessions. (Thankfully.) The table above provides a comparison with the '82 recovery with the current recovery. The early '80's saw the worst recession in the … [visit site to read more]

Celebrating Corporate Failure

Posted: 16 Jan 2010 09:00 AM PST

Nobody knows prices like Mr. Market. And that's precisely why the US government is so scared to subject him to any serious line of questioning…it's afraid of how bad the answers might be. But what's really to be scared of?
Left to their own devices, there is little doubt that institutions like the nation's largest insurer and its flagship automakers would have already found their place in the corporate tar pit. But instead of letting these dinosaurs die in disgrace, DC greases up the … [visit site to read more]

Government Spending Economic Theory

Posted: 16 Jan 2010 07:00 AM PST

Obama says the feds 'saved' 2 million jobs. But the cost of each job saved was as much as $65 million, according to our not-very-precise accounting.
Was it worth it?
Yesterday, we went on at some length as to why government jobs weren't the same as private sector jobs. Since they're never put to the test of the market, you never know whether they are worth having, let alone saving. Do they add to the sum of human wealth and happiness…or do they subtract from it? No one knows for … [visit site to read more]
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