It seems the market will swing with or without the US!
January 20th, 2009 by Cale McCulloch
Closing Data
| current | change | % | |
|---|---|---|---|
| Dow Jones | 8281.22 | 68.73 | 0.8% |
| NASDAQ | 1529.33 | 17.49 | 1.2% |
| S P 500 | 850.12 | 6.38 | 0.8% |
| FTSE 100 | 4108.47 | -38.59 | -0.9% |
| Nikkei 225 | 8256.85 | 26.7 | 0.3% |
| SPI Futures | 3485 | -64 | -1.8% |
| All Ords | 3,531.00 | 36 | 1.0% |
| Oil | 34.56 | -0.82 | -2.3% |
| Gold | 839.9 | 32.6 | 4.0% |
| Silver | 11.215 | 0.775 | 7.4% |
| Aluminium | 1445.5 | 14.5 | 1.0% |
| Copper | 3343 | 132.5 | 4.1% |
| Lead | 1162 | 32 | 2.8% |
| Nickel | 10755 | 145 | 1.4% |
| Tin | 11300 | 295 | 2.7% |
| Zinc | 1245.5 | 5 | 0.4% |
With the US markets not trading overnight, the European markets swung violently. The London FTSE 100 rallied almost 2 percent on the open. Investors took comfort in Prime Minister Gordon Brown’s additional plans to stem issues flowing from the financial system by allowing the Bank of England to buy securities and guaranteeing toxic assets.
The comfort was, however, short lived as the Royal Bank of Scotland plunged 67% (at the close) after saying it expects to post a loss of some 28 billion pounds for 2008. This, and of course renewed scepticism about the ability of the government actions to resurrect the faltering financial system, led to a European sell off. With all 18 Western European markets finishing in the red!
The Australian market is expected to open 14 points lower if the SPI traders are correct, but strength in commodities could stem losses and possibly guide us higher throughout the day. Wesfarmers, an underperformer in 2008 on the local market, surged yesterday following speculation they are close to securing refinancing for debt not due until later in 2009. The company is expected to give a briefing regarding this tomorrow. Successful early refinancing could be the catalyst the stock needs to regain some of the value lost in 2008.
Oil edged down in electronic trading, as a cease fire in Gaza, combined with a resolution to the Russia/Ukraine Gas dispute, relieved some supply concerns that had sparked a price rise in recent weeks.
Cale McCulloch
Equities and Options Adviser
This is a series entitled Curious Investor Behaviour courtesy Platinum Asset Management.
No 1. Phase Myopia
At different phases of the market, our perspective changes.
In the steepening down phase there is a tendency to take an ever narrower view of the facts, focussing on near term risk, rather than longer term reward.
Conversely, a developing bull market inspires an ever more extravagant view of opportunities.
Have you ever found yourself suffering from this condition??
Neil Gynther
Head of Stockbroking
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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