The Tug of War continues
January 13th, 2009 by Cale McCulloch
Closing Data
| current | change | % | |
|---|---|---|---|
| Dow Jones | 8473.97 | -125.21 | -1.5% |
| NASDAQ | 1538.79 | -32.8 | -2.1% |
| S P 500 | 870.26 | -20.09 | -2.3% |
| FTSE 100 | 4426.19 | -22.35 | -0.5% |
| Nikkei 225 | 8836.8 | -39.62 | -0.4% |
| SPI Futures | 3649 | 28 | 0.8% |
| All Ords | 3,624.00 | -56.5 | -1.5% |
| Oil | 37.65 | -3.04 | -7.5% |
| Gold | 821 | -34 | -4.0% |
| Silver | 10.75 | -0.57 | -5.0% |
| Aluminium | 1520.5 | 4 | 0.3% |
| Copper | 3280 | 109.5 | 3.5% |
| Lead | 1185 | 39.5 | 3.4% |
| Nickel | 11375 | -100 | -0.9% |
| Tin | 11350 | 100 | 0.9% |
| Zinc | 1220 | -10 | -0.8% |
The Tug of War continues
The revival and a mild degree of confidence in the early stages of 2009, seems to have been short lived, as investors and traders fell back into the grips of fear, which many thought was dissipating just a week ago. The tug of war between weak economic data, bad earnings and what appear to be good valuations on a long term basis, appears to be back in full swing.
While the market drifted lower in recent sessions as negative economic data (mainly jobs data) reignited the fear in investors, earnings season for Banks and miners kicked off last night. Alcoa reporting its first quarterly net loss in six years. The company cited the credit crunch, leading to weak global demand for Aluminium from Car makers, Builders, and appliance manufacturers alike. The result amounted to a net loss of $1.49 per share, compared to a net profit of 75c per share in the corresponding period last year. The stock fell 7.5% overnight. Alcoa flagged this result a couple of weeks ago with a profit warning.
Bad results and bad economic data will continue to flow as the global economy moves through this downturn, but the question that no one can answer is whether the current share market levels have priced this in?
Time will provide the answer. We believe most of this has been priced in, and the index should stabilise. There will be worse than expected results from some companies and better than expected by others.
Oil continued its decline of recent sessions, falling just over 3 dollars to USD 37.69. While Gold fell just under 4% to USD 820 per ounce.
Expect a fall today, with the SPI pointing to a 60 point decline on the local index. We will probably see light volume until domestic reporting kicks off in February.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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