topics
tools
Expatica countries
Index Last Var.(%)
BEL 20 2105.36 -1.73
DAX 6335.77 -1.55
IBEX 30 6517.5 -2.16
CAC 40 3023.8 -1.95
FTSE 100 5305.45 -1.81
AEX 290.41 -1.87
DJIA 12502.81 -0.01
Nasdaq 2839.08 -0.29
FTSE MIB 13109.85 -2.57
TSX Composite 11451.78 1.52
ASX 4118.8 -1.31
Hang seng 18786.19 -1.33
Straits Times 2780.42 -1.53
ISEQ 20 489.16 -1.85
You are here: Home News European News Global market update, Wednesday 10 December 2008

European News

archive
Enlarge font Decrease font Text size


10/12/2008Global market update, Wednesday 10 December 2008

Global markets rallied as investors became hopeful that government stimulus measures could limit the damage from the credit crisis.

WORLD – Global markets rallied on Monday, as investors became hopeful that government stimulus measures could limit the damage from the credit crisis.

US President-elect Barack Obama’s weekend announcement of large-scale infrastructure spending and the rescue plan for US automobile manufacturers, which seemed to be nearing a conclusion, buoyed stock prices. Both European and US indices climbed.

Shares in commodity producers moved higher, tracking oil and metal prices which rose due to expectations that stimulus packages would soften the global economic downturn and improve demand for basic resources.

Industrials and materials companies also gained, while automobile firms advanced after US lawmakers agreed in principle with the Bush administration on providing funds to prevent the collapse of General Motors and Chrysler. US transport bellwether FedEx cut its full year 2009 earnings outlook after the market closed on Monday.

Asian indices generated mixed returns Tuesday morning. US stimulus plan boosted confidence, with raw materials producers and exporting firms among the key beneficiaries. However, some stocks came off their early highs as investors locked in profits following a surge in the previous session.

Fixed Income Markets
European government bonds declined due to speculation that Obama’s public-spending package might stimulate economic growth. This pushed stocks higher, sapping demand for safe assets. Bond prices remained under pressure after ECB council member Ewald Nowotny stated that policy makers are in wait-and-see mode on interest rates.

US Treasuries also fell, pushing yields up from record lows, as the government announced it would auction a more-than-forecast USD 44 billion in three-and 10-year notes later this week. Three- month bills drew a rate of 0.005%, the lowest ever, suggesting investors are still seeking a haven in the relative safety of government debt. Elsewhere, Japanese debt markets opened lower this morning taking cues from their US counterparts.

Looking Ahead
Congressional Democrats sent President George W Bush a USD 15 billion draft proposal for short-term rescue of US automobile firms and said that it is likely be voted on this week. The plan would require the president to appoint a person or board to oversee long-term restructuring of the industry as a condition for companies to receive federal aid. Final details are yet to be worked out and White House officials said they do not agree with some aspects of the legislation.

Recently, Barack Obama said it is not an option to let US automobile manufacturers “collapse” and throw more workers out of jobs, any government loan or aid they get must be conditioned on the companies revamping their business and their products. He also stated that more aggressive steps are needed to cope with the housing crisis.

More headwinds are due this week from a spate of key economic reports. On Thursday, the US Labour Department will release first-time claims for unemployment benefits. On Friday, the Commerce Department is due to announce November retail sales.

Other economic indicators include the Reuters/University of Michigan Consumer Sentiment Index and the Producer Price Index reported by the Labour Department. Investors also await reports on European economic sentiment, UK trade balance, retail sales and manufacturing numbers.

As economic activity continues to deteriorate, policy makers are mulling more aggressive measures to revive spending. Both the European Central Bank (ECB) and the Bank of England slashed interest rates last week, leading to speculation that the Fed could follow suit. Given that its benchmark rate is already at 1.0 percent, the Federal Open Market Committee, which is scheduled to meet on 15-16 December, faces the difficult decision of whether to signal a move to zero interest rates.

For further information, or to discuss how current global economic conditions are affecting your investments, please feel free to contact Craig Welsh at Spectrum IFA Group or visit www.expatfinance.nl

This commentary was compiled with the assistance of Fidelity International, one of the world’s leading investment management groups.


0 reactions to this article

Be the first person to add a comment

General rating: Not rated yet

Rate article:    Add my rating



0 reactions to this article

Be the first person to add a comment
Discussion Forums

Community Noticeboard United Kingdom

BUY NOVELTY DRIVING LICENSE,ID CARD, PASSPORT

Community Noticeboard United Kingdom

$100 MasterCard for Member with most new members

Community Noticeboard United Kingdom

Website for special needs and disabilities

Community Noticeboard United Kingdom

Military tour to Ukraine for football fans of Euro 2012

UK News

what do you think about the news of the world scandal

participate in the forums

Inside Expatica
Visas for coming to the UK

Visas for coming to the UK

Visa paperwork Whether you're relocating to the UK or just visiting, it's important that you find out in advance whether you need a visa.

An online guide for expats finding & purchasing a UK Property

An online guide for expats finding & purchasing a UK Property

Expat mortgages and everything to do with buying a UK property might sound complicated, but there’s plenty of help out there for you.

UK healthcare: Finding the right NHS service

UK healthcare: Finding the right NHS service

You can access the UK's National Health Service (NHS) in a range of ways. Here is an overview of the main services available to help you get the treatment you need.

Banking in the UK

Banking in the UK

Just moved to the UK? You'll need a bank account to effectively manage your money while you're here. Cliff Govender explains the UK banking system, including facilities that may come in handy down the line.