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DOW

very good 4 shorting 2morrow.....not an inducement 2 buy or sell.

 

US market shitting again tonite .... Dow down 150 points now!

Btw, tech counters are subprime "proof". Get the picture? My guess is time for a tech rally in 2H '07.

 

haha yes chipchip, am lkg to clear my puts tmrw. wish me luck! :)

actually, pension, the question is simple, but it's about human nature. Banks charge 24% interest for credit card debt. yet so many singaporeans and people all over the world owe credit card debt. what more a 5.75% mortage loan, which is 'cheap' by comparison?

and the fed cannot cut rates. because in the first place, the subprime problem was due to them cutting rates back then, making all these loans cheap for all those people. if they cut rates now, it's just digging a deeper hole and exacerbating the problem. that's why they're doing everything they can EXCEPT cut rates.

if they do cut tho, expect a temporary rally, then a confirmed bear market for the years coming; for the US and Europe side. asia remains a question.

 

Now, sp,dow and nasdaq is in red. I think it will affect sti and asia pacific share tommorrow if it ended up red. Seem that the sub prime load nightmare is not over. Only solution to solve this problem is FED to reduce interest rate immediately and not pumping in billions of dollars into the fiancial market which benefit the bank and not the consumer. With high interest rate, sub prime problem will continue because the buyer cannot afford to pay the loan and they cannot sell their property. In no time, the property market will come to a stand still. Ask yoursef a simple question, would you like to borrow from bank at high interest rate to purchase property ?? For me, a big no.

 

Earnings disappointment from Wal-Mart and Home Depot could lead DOW lower. Bumper earnings for STI should see decoupling to some effect. Hope put-warrant holders are able to close their positions before STI makes a sterling comeback.

 

recently climb has been of low volume even for pennies.. also rally always start with blue cheap 1st. currently blue chip not raising..

 

eh well. elf's a regular bear cub at this period in time. and i figure, rather be an erroneous bear cub in a bull market and not lose money (even if it does cause a regular howl looking at prices go up) than a bull in a bear market and bleed.

DJIA update:

13164.11

-72.42 / -0.55%

------------------------

Wal-Mart drags on Dow

Blue-chip indicator dips after Wal-Mart's forecast, sales miss; broader market mixed on mild core inflation reading, narrowing of trade gap.

 

The Dow is now up 89 pts...

but looking at the period (3-month chart), the picture is very bearish...

Of course those who are "heated frogs" will disagree very strongly...

 

we all know and seen how the DOW fluctuates last week...and that greatly affect our local markets too despite the many assurance by organisations and government bodies...we need a clear direction to end this credit woes...subprime problems...if not, u will be trading in dangerous waters still in the near-mid term...

 

Dow up 70 points now

 

it will be good if the DOW will rise slowly and not up suddenly by 3 figures...the momentum needs to be build up gradually...a sudden upswing will mean the volatility is still here to stay...so it may go up high one moment and come down plunging the next...

 *Slow and Steady Wins the Race
 

 

I believe it will be at least 3 figures closing...let hope so...

 

The $ have strengthen alot...look like tonite the DOW will be strong..

 

NEW YORK (CNNMoney.com) -- U.S. stocks are likely to open higher Monday after credit fears caused global markets to swoon last week.

At 6:29 a.m. ET, Nasdaq and S&P futures were off their highs, but still pointing to gains at the start of trading.

 

ECB, US Fed Acknowledged Risks

At its meeting Tuesday, the Fed kept rates at 5.25% for the ninth meeting running and said inflation pressures remained its "predominant" concern. Policymakers acknowledged that "financial markets have been volatile in recent weeks" and that, with credit conditions tightening, "downside risks to growth have increased somewhat." Yet they continued to predict moderate growth. As for the ECB, it held rates steady at 4.0% last Thursday, but in one sign of confidence, Trichet hinted strongly the bank would raise rates in September. He emphasized that "sustained economic growth" had continued in recent months. Like the Fed, the ECB acknowledged the risks, saying "we are experiencing a period of market nervousness, a period where we see volatility in markets in general and re-appreciation of risks." Trichet promised to "pay great attention" to developments. For some, central bankers' acknowledgement of greater risks was as much as could be expected of them, not least given the fact that policymakers have repeatedly warned investors over the last year that risk premiums had fallen too low. Alan Ruskin, chief international strategist at RBS Greenwich Capital in Greenwich, Conn., said that if the Fed and the ECB were meeting Thursday, they would be unlikely to dramatically rewrite their comments. "To some extent, events move on...I'm not sure they would say that many different things but they've clearly been forced to act to deal with a classic short-term liquidity crisis," he said. Dominic White, European economist at ABN Amro in London, also said there was no clear "contradiction" between what the two banks were saying and their actions Thursday. "What they've done is they've given their fundamental view of the economy and that may not necessarily always line up with what you see happen in financial markets," White said. The Fed has "to ensure financial stability. That's what it's done today and that's what's the ECB done." Still, for investors, the juxtaposition of policymaker calm and market chaos is not a happy one. In recent years, market confidence in the views and moves of policymakers has helped bring the global financial system through shocks that in the past may have toppled it - from the collapse of Long Term Capital Management to the Sept. 11 attacks. If investors start to believe central banks are either being less than fully truthful with them or are flying blind, the current market nervousness could get worse. "Unfortunately, you can't formulate policy with 20/20 hindsight," said Jason Evans, head of government bond trading at Deutsche Bank in New York. While the Fed's view of events could yet prove correct and markets settle down, Evans said "I think it's unfortunate (for the Fed) that markets have become so unruly so quickly."

 

The decisions Thursday by the world's two most heavyweight central banks were a reminder of the old adage that actions sometimes speak louder than words.

Just two days after a Federal Open Market Committee statement that acknowledged recent market turbulence but struck a message of calm on the broader fallout, the US central bank was forced to inject liquidity into money markets to push key short-term borrowing rates lower.

Those rates had spiked after a unit of French bank BNP Paribas said it had temporarily suspended valuation and redemption in three of its asset-backed securities funds because of "complete evaporation of liquidity in certain market segments of the US securitization market." The announcement was the latest suggesting major banks are more vulnerable than was previously thought to the blowup of the US subprime mortgage market.

The Fed's action followed hot on the heels of the European Central Bank's injection of some $130 billion into regional money markets overnight, as the Old Continent suffered its own credit crunch. The ECB also issued a statement noting the "tensions" in the money markets and promising it "stands ready to act to assure orderly conditions."

As with the Fed, it was only a few days ago that ECB President Jean-Claude Trichet was sounding a note of cautious confidence about what he described as a repricing of risk.

The gap between central bank actions and words is certainly not unbridgeable. Economists are quick to point out that a short-term liquidity fix for troubled money markets is not a sign that credit markets are about to collapse or that the pain will spread more broadly into the real economy.

Still, at the very least, the action has muffled the soothing impact of the banks' recent statements. At most, the central banks' lack of foresight raises questions about how accurately policymakers are reading current events, said Tony Crescenzi, chief bond market strategist, Miller & Tabak.

"What stands out most from this situation is its proximity to the Federal Reserve's meeting on Tuesday. If the Fed had even the slightest inkling that a problem of this scale might occur, its statement would have had a full tilt toward neutral rather than the partial tilt it gave," Crescenzi said.

"Today's events show that either the Fed committed a large policy error on Tuesday, or that both the Fed and the ECB are themselves more in the dark on the problems that lie underneath the surface than are investors in the financial markets."

 

Possibly A Healthy Development?

From a different point of view, UOB Asset Management perceives the rout in the global market as a "re-pricing of risk" or a "phase where the price of risk is being normalized". It believes that this will ultimately turn out to be a healthy development, instead of a potential credit crunch.

"The global economy is as strong as it has been in the last four years and is currently on track to achieve 4.9% growth in 2007. Global growth is also now more balanced because it is not overly dependent on the US. The US is likely to grow below trend this year but the economies of Europe, Japan, China and the Emerging Economies are all currently firm," said UOBAM.

The local-based asset management firm also reiterated its positive long-term view on Asian equities, with the belief that the current developments in the financial markets will not likely derail structural trends such as globalization and the urbanization of China and India.

 

Fund Managers Remain Upbeat, But Expect Volatility

Generally, fund managers are adopting a sanguine view about the recent sharp global sell-down.

HSBC Investments sees that the correction is likely to be temporary but probably painful in the short term. It commented, "As the cycle is still healthy and interest rates are not high, the trend for equities is expected to be up." While maintaining its positive views on the Asian equity markets due to their good growth prospects, solid upward earnings revisions and relatively attractive valuations, it also cautioned investors that markets are likely to remain volatile.

Schroder Investment Management Ltd also offered an optimistic view, though it expects volatility to continue in the short term. "Short-term corrections are nothing new to global investors. Nerves were tested in June last year and then again in February this year. In both instances, the market over-reacted to what were arguably justified concerns," said Schroders. It pointed out that the investors were quick to recognize the attractiveness of the economic and corporate fundamentals of the global economies subsequent to both sharp corrections, possibly implying that the correction this time round may not stay for long. Nevertheless, it believes that the markets are likely to be exposed to volatility and remain very sensitive to negative newsflow in the short term.

Casting an upbeat view on the sub-prime issue, Christopher Molumphy, CIO of the Franklin Templeton Fixed Income Group, believes that sub-prime woes will most likely not spread to the much larger prime section of the mortgage market. He opined, "While there is certainly a risk, we are of the view that sub-prime loan problems will not have a dramatic impact on the overall financial markets."

Shane Oliver of AMP Capital Investors, however, painted a slightly more dismal picture of the situation. He opined that the fall-out from the US sub-prime mortgage crisis is likely to to run further. In his opinion, the uncertainty about the impact on the US economy will be around for a while and it will take time for investors in credit markets to recover their confidence. Oliver expects further downside in the global equity markets in the short term, and that the rough patch could last for several months, potentially shaving 15% off the global stock markets. Despite this, he maintains his view that the global economy is still in good shape, given the relatively low inflation and interest rates, attractive share valuations, low corporate gearing and solid profit growth.

 

Fund Managers' Views On The US Sub-prime Lending Woes

Global equity markets tumbled in the past two weeks, amid investors' heightened jitters over a perceived US' sub-prime mortgage credit crunch. In a flight to safer assets and due to profit-taking, investors worldwide exited global stock markets in droves, leading to yet another notable sell-off since February this year.

Sub-prime loans are a type of loans offered at a higher interest rate to home-buyers with poor credit histories who do not qualify for the prime rate loans. Currently, sub-prime mortgage loans account for 10% to 15% of the US'overall mortgage market.

The exacerbating situation of US sub-prime housing loan delinquencies had also led to the recent bankruptcy of two Bear Stearns' hedge funds ? the Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd and the Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd; both of which were heavily exposed to the US sub-prime housing sector.

 

Extracted from CNBC.

Despite all the volatility, stocks ended with relatively minor changes on Friday and were actually up for the week. The Dow Jones Industrial Average posted a weekly gain of 0.4%, while the S&P 500 rose 1.4% and the Nasdaq Composite climbed 1.3%.

The Dow remains up 6.2% year to date while the Nasdaq is not far behind with a 2007 gain of 5.4%. The S&P 500 has lagged the other major indexes, clinging on to a year-to-date rise of 2.5%.

 

Analysts say investors should brace for more weeks like this .

"You're going to have choppy couple of weeks here with death by paper cuts," said Jason Trennert, chief investment strategist at Strategas Research Partners. "Ultimately the system is strong, valuations are very reasonable and the ECB and Fed seem to be on top of their game ? and are there to support the market if need be. Once the dust settles we think the Fed is going to ease and I think a lot of large cap stocks are on sale here."

Other market pros agreed that the recent selloff may have been overdone.

"Personally, I think its being overdone and every talking head is talking about the end of the world, but the reality is that it's not," said Patrick Fay, director of equity trading at DA Davidson.

"The fundamentals have gone out the window for awhile, and in some cases it means that better value has been created," Abby Joseph Cohen, chief U.S. portfolio strategist at Goldman Sachs, said on CNBC. "We think (the S&P 500) is about 10% underpriced and that typically has been a good entry point."