Market brief 26/5

Market brief 26/5

May 26 (Bloomberg) -- U.S. stocks fell, halting a global advance, and the euro weakened as reports that China may review its investments in European government bonds spurred concern the credit crisis will worsen. (How much did China lose? 30%, :)))

http://www.bloomberg.com/apps/news?pid=20601087&sid=aqSA9MR6mDgo&pos=1

China’s State Administration of Foreign Exchange has met with foreign bankers because of concern about exposure to Europe, the Financial Times reported without saying where it got the information. China Investment Corp., the nation’s sovereign wealth fund, may lower its allocation of assets to Europe, Reuters said, citing President Gao Xiqing. U.S. stocks gained and Treasuries fell earlier as new-home sales rose to the highest in two years and durable-goods orders beat forecasts.

“People are scratching their heads,” said Mark Bronzo, an Irvington, New York-based fund manager at Security Global Investors, which oversees $23 billion. “We had good economic data points, but that did not help. We couldn’t sustain the gains. People are on the sidelines. There are too many uncertainties about Europe.”

The “euro has been trading terribly,” Peter Boockvar, equity strategist at Miller Tabak & Co. in New York, said in an e-mail. “Once euro broke the 1.22 level, selling picked up in everything else.”

These two guys argue fiercely on the topic "Where the euro will go?"

May 26 (Bloomberg) -- David Bloom, global head of currency strategy at HSBC Treasury & Capital Markets, and Geoffrey Yu, currency strategist at UBS AG, talk about their forecasts for the euro and the dollar. Bloomberg's Andrea Catherwood moderates their debate in London.

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Sth on Asia


Asian Markets End Higher On Bargain Hunting As War Fears Recede

The markets across Asia recovered smartly on Wednesday from the sharp plunge in the previous session taking cues from Wall Street where the major averages recovered most of the early losses and in afternoon session and ended mixed at the close. Bargain hunting at lower levels across the stocks in all markets lifted market sentiment from one that of gloom and concern to that of optimism about market fundamentals. Higher commodity and oil prices also impacted market sentiment .

In Japan, the benchmark Nikkei 225 Index rose 62.77 points, or 0.66%, to 9,523; however, the broader Topix index of all First Section issues was down 0.82 point, or 0.10%, to 859.

On economic front, a report released by Shoko Chukin Bank revealed that Japanese small business confidence fell to 46.7 in May from 46.8 recorded in April. A reading below 50 indicates pessimists outnumber optimists. Confidence among manufacturers slipped 0.7 points to 47.4. Meanwhile, sentiment among non-manufacturers moved up 0.3% points to 46. The survey was conducted among 1000 companies.


OECD sẽ không suy thoái kinh tế lần 2?

http://cafef.vn/20100526035833624CA32/oecd-kinh-te-chau-au-se-khong-suy-thoai-lan-hai.chn

Let see. Ít ra đồng Euro giảm mạnh cũng có cái lợi của nó.

http://cafef.vn/20100526113945927CA32/chinh-phu-y-duc-phap-tay-ban-nha-that-chat-ngan-sach.chn

Nhưng mà mấy bạn này thắt ngân sách thì GDP khó tăng nhanh được. Confidence tiêu dùng sẽ thấp.

Mỹ không chịu cắt chi tiêu NS nên Moody's hù "tao downgrade xếp hạng à". Giống bác chief strategist của HSBC cãi với bác Yu của UBS "mày swing around các đồng tiền, thằng Mỹ nó không làm cái gì kìa, bữa nay mày hô hào EUR yếu, 3 tháng nữa mày lại hô hào sell USD chắc!"

http://cafef.vn/2010052605265408CA32/moody-canh-bao-ve-xep-hang-no-cua-my.chn

Cuối cùng, báo VN đưa tin: DJ mất 10K. Quan trọng không? Somehow, at least temporary support. But does not change the trend (sadly, a short-term downtrend). So why bother? Cần quan tâm những support từ 97xx tới 95xx có đứng vững không là hơn (very likely là hold, at least short term).

http://cafef.vn/20100527054220853CA32/dao-chieu-trong-nua-gio-cuoi-dow-ones-mat-moc-10-nghin-diem.chn

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Conclusion: Don't see any breakout signals, but see panic trades. Bonds are overvalued, stocks are oversold. Gold looks attractive, but still near the highs (historical highs!). Inflation fears waned due to low oil price. Now gold lives on fears of uncertainty. When there are more fears, some will turn greedy (hopefully soon). Stand aside and be patient.