Investment of Mine

Closing bell of the stock market:

Nikkei    -96.64    -1.12%    8,568.02
Topix  -18.31  -2.20% 828.62.
FTSE    +31.52    +0.74%    4,309.08
DAX    +75.09    +1.61%    4,729.91
CAC    +66.00    +2.07%    3,251.66
Dow    +359.61    +4.20%    8,924.14
NASDAQ    +81.55    +5.41%    1,589.89
S&P    +44.61    +5.14%    913.18
10yr Note    -1.7000    -0.671%    2.363%
NYMEX Crude Oil    -0.91    -2.04%    43.60
Gold    +6.20    +0.74%    842.70

On Tuesday Japanese stock indices closed with losses due to the apprehensions of the prolonged recession the results of which will be the fall of the profit of the largest producing companies and the representatives of the mining sector. The stocks of the Nippon Steel Corp. and JFE Holdings Inc., the largest steel producers, lost more than 4% after it had become known that the Toyota Motor Corp. was going to ask for the reduction of prices on the materials. Asahi Glass Co. and Nippon Electric Glass Co. became the leaders of the fall in the sector of glass production after the UBS AG had recommended the selling of the companies’ stocks due to the decrease in demand. Sony Corp. lost today 5.9% after the reduction of the Company’s goal rate by the analysts of the Credit Suisse Group by more than two times. It happened due to the reaction of the electronics producer, which was not quick enough, to the slowing of the economic growth rate.

On Tuesday European stock indices closed growing in spite of the serious quarterly losses. Goldman Sachs GS announced about its losses following the results of the fourth quarter in the amount of $4.97 per stock and this fact negatively affected the dynamics of the financial sector. The stocks of the oil-mining companies and the companies representing the materials sector consolidated their positions in the course of the oil prices growth due to the expectations of the reduction of the volumes of oil production at the tomorrow OPEC meeting by 2 mln barrels a day. The growth of the pharmaceutical sector caused by the hunt for the cheaper stocks also supported the market.
Siemens AG and BASF SE gained more than 2% due to the expectations of the further actions on the part of the FRS to stimulate the consumers’ and business demand in the world’s largest economy. The fall of prices on copper in London triggered the decrease of the stocks of the BHP Billiton Ltd. and Rio Tinto Group by more than 2%.

Drastic reduction of the rates by the FRS provoked rally on Wall Street despite the weak economic data.
Before the beginning of the session a string of the statistics data was released demonstrating the decrease of the consumers’ inflation in November by 1.7% (the record monthly reduction) while the economists have forecast -1.3%. The basic rate did not change in November and grew by 2% year-on-year.
The number of new buildings in November reduced to the record minimum of 616.000 year-on-year in November while the average forecast made up 700.000. The number of the building licenses also appeared to be on the historic minimum of 708.000 year-on-year (minimum since March 1975). Before the opening of the market the Goldman Sachs announced about the bigger than it had been expected losses in the amount of $2.1 bln or $4.97 per stock.
After the FOMC’s decision had been announced major indices continued their growth and finished the day in the area of the session maximums. FOMC made a decision to reduce the base rate of interest (FF rate) to the goal diapason from 0 to 0.25%. Deposit rate (DR) was reduced by 75 basic points to 0.5%. In the accompanying form of the FRS it is particularly pointed out that the Central Bank is going “to use all the means possible” to minimize the consequences of the crisis and the extremely low level of the rate of the federal funds will be preserved for “some time”. The FRS is going to keep purchasing agents’ liabilities secured by the mortgage bonds (MBS). Besides, in case of emergency it is ready to increase the purchases and is considering the possibility of purchasing long-term liabilities of the US Treasury.
At the beginning of 2009 the Term ABS Loan Facility plan will be introduced “to activate crediting of the households and small-scale business”. Apart from this there will be discussed the additional measures to use the balance of the FRS to support the credit markets.
Nasdaq occupied the leading positions supported by the growth of the stocks of the largest representatives of the technological sector which yesterday suffered the most serious losses, Microsoft in particular.
Meanwhile, another giant of the technological sector – IBM – supported the growth of the Dow Jones Industrial Average.
Interest in the stocks market traditionally negatively affected the situation on the market of the Treasury obligations. Oil suffered losses as well and according to the daily results decreased by 2.0%. In the middle of the session the growth of the “black gold” reached 4.5%.

Dollar fell to the six weeks’ minimum against euro and suffered losses in reference to yen after the release of the regular string of the weak economic data from the USA and in the course of the price fall of the dollar-denominated credit resources, which became the reflection of the fall of demand on the eve of the holiday season. According to the data of the British association of bankers the three months’ dollar rate Libor decreased yesterday by 0.1 and reached the four years’ minimum of 2.00%.

The deficit of the trade balance in the USA grew in October to $57.2 bln compared to the expected $53.5 and $56.6 the month before. In November the prices on import decreased by 6.7% month/month and 4.4% year/year. The number of applications for the unemployment benefit reached the twenty-six years’ maximum of 573.000.

It is worth mentioning that the data of the retail sales are not much better either compared with what has been expected (-1.8% in November instead of -2% forecast and 2.8% record fall the month before).

Not taking into account the car sales in November the rate made up -1.6% instead of the forecast of -1.8% and -2.2% in October.

In November PPI decreased by 2.2% and the basic value of the core PPI made up 0.1% compared with 0.4% growth in October.

Euro was positively influenced by the release of the not that weak value of the business expectations index of German Research Institute ZEW. The indicator of the economic expectations of the German investors and experts made up -45.2 in December instead of -53.5 the month before. Additional support to the common currency was given

by the announcement of one of the members of the ECB management board Jurgen Stark which made the investors doubt that the ECB would aggressively reduce the rates. Swiss franc suffered losses against euro and yen after the central bank of the country reduced major interest rate to 0.5% - minimal Rate for the last 4 years.

Thus, in the nearest future one should expect the tendency of the American currency and taking into account the decrease of liquidity on the markets expecting holidays mind the speeding-up of the dollar fall.

On Friday the dollar recovered from the thirteen years’ minimum against yen due to the speculations that the US government is going to help the American automakers General Motors Corp. and Chrysler LLC.

“We see the Treasury coming into play” Brian Kim, currency strategist of the Stamford branch of the UBS AG, says. “This fact supports the market”.

The announcement of the Treasury almost brings to nought the possibility that the large automaking companies will be declared bankrupts, which from the point of view of the investors can be regarded as a reason for the reserved optimism. The failure of the aid package to the automakers in the Senate caused the yen consolidation against the major currencies. The senators failed to find a compromise with the representatives of the automakers’ trade unions as for the reduction of the workers’ salaries that’s why there lacked 60 votes for the adoption of the $14 bln aid plan. After the proclaiming of the Senate’s decision, according to some announcements, the General Motors Corp. hired the lawyers and bankers to consider the issue about asking for the protection against the bankruptcy.

The recovery of the confidence on the markets may lead to the activation of the yen sales in the course of the recovery of interest to carry trades and cause the renewal of pressure on the dollar.

According to the weekly results, the reduction of the American currency made up 1.8% and against euro – 4.7%. Since the beginning of the current year the US dollar has lost 19% against yen, which became the most significant weakening of the American currency since 1987.

Pound renewed the historic minimum against euro at 89.97 pence after it had become known that the housing sales in Great Britain fell to the minimal level since 1978, the decrease of the industrial production turned out to be three times bigger in comparison with the economists’ forecasts and the recession in the country according to the British Royal Institution of Chartered Surveyors went deeper.

“Pound can suffer serious losses against dollar as well” Thomas Kharr the leading currency strategist of the Singapore branch of the Standard Chartered Plc. believes. “The perspectives of the British economy look awful. We think that the Bank of England will have to continue reducing the rate drastically”. Pound, according to the expert’s point of view, may fall in the first quarter of the next year to $1.35 per dollar and the Bank of England will reduce the interest rate to 0.5%. Last week the Bank of England reduced the rate to 2% - the lowest level for the last 50 years. Market traders expect the reduction by 0.25 points in January 2009.

Digest of the stock market December 10th, 2008:

Nikkei  +264.37 +3.20%  8,660.24
Topix   +16.61  +2,00%  834.55
FTSE    -13.98    -0.32%    4,367.28
DAX    +25.77    +0.54%    4,804.88
CAC 40     +22.51  +0.68%  3,320.31
Dow    +70.09    +0.81%    8,761.42
NASDAQ    +18.14    +1.17%    1,565.48
S&P    +10.57    +1.19%    899.24
10yr Note    +0.1500    +0.056%    2.684%
NYMEX Crude Oil    +1.45    +3.45%    43.52
Gold    +34.60    +4.47%    808.80

Japanese stock markets keep on growing. The investors were optimistic about unofficial announcements that the White House and the representatives of the Democratic Party had reached an agreement as for providing $15 bln of financial help to the car makers of the USA. The growth leaders still remain the companies of the real estate sector and cargo carriers.
After the announcement that the government of the country can provide Japanese developers suffering financial difficulties with credits, the rates of the country’s fourth largest builder Tokyo Land Corp. rose by 16%, those of the Japanese second largest developer Mitsubishi Estate Co. – by 7.6%. The trades were also successful for the Japanese cargo carriers. After the freight stochastics Baltic Dry Index grew by 1.2%, the stocks of the Japanese second largest sea carrier Mitsui O.S.K. Lines Ltd. increased by 10.4%, those of the Nippon Yusen KK – by 6.5%.
The trading session for such Japanese car makers as Honda Motor Corp. (+10.3%), Toyota Motor Co. (+6.6%) finished on the positive territory as well. According to the trades results of December 10th the Nikkei index grew by 264.37 points (+3.15%) – to 8660.24 points.

Institute of Economy and Social Research released the report saying that the decrease of the country’s economy from September to November exceeded expectations and made up 1%.
The growth of metal prices and the situation around the Rio Tinto supported the stocks of the mining companies. Rio Tinto announced that they planned to discharge 14 thousand of employees and cut expenses by $2.5 bln to cope with the financial crisis. Following this announcement the securities of the Rio Tinto rose by 20%, those of the BHPBilliton Ltd. – by 6.7%, those of Xstrata Plc. – by 6.6%.
Expectations of voting for the salvation plan of car makers in the US Congress to support the stocks of the European auto industry. Thus, the rates of the stocks of the German BMW grew by 2.3%, those of the French Peugeot Citroen – by 6.9%.
The securities of the French media group Vivendi SA (-3%) and British store chain selling the video games Game Group (-6.8%) negatively finished the session against the background of the news from the USA. Investors on the European stock markets were not optimistic about the announcement of the world’s second largest producer of the video games – the American Electronic Arts Inc. – as for the forecast reduction of the net profit and gain in 2009.

The stock indices on Wall Street finished the changeable trades of Wednesday’s session by the rates growth. The indices were supported by the announcement that the US government is ready to allocate the term credit in the amount of $15 bln to the concerns General Motors and Chrysler. Apart from allocating the credit, it is suggested to make the US government the largest owner of the stocks of the General Motors and Chrysler. In the nearest future the voting of the Congress for this issue is expected. It is worth mentioning that the Ford did not announce about the necessity of the urgent financial support. Nevertheless, they still asked the government for the $9 bln credit in case of the worsening of the financial rates of the company.
According to the session results, 8 out of 10 major economic sectors consolidated. The materials sector (+2.7%) and the power generating sector (+4.7 %) were at the top of the increase due to growth of the commodity prices.
The financial sector demonstrated the worst results (-0.8 %) among the sectors. The stocks of the American Express (-7.5%) appeared to be under the flow of suggestions after the reduction of their rating by the Citigroup Bank of America.
The consolidation of indices was supported by the weak corporative news. The world’s largest producer of the video games the Electronic Arts Company announced about the revision of its profit forecast in the direction of reduction. The Company’s stocks decreased by 13.8%. It is said in the Company that the preliminary data of the sales analysis demonstrated the reduction of demand for video games even despite the New Year sales and traditional boom of demand for new electronic products.
The office equipment retailer Office Depot announced about its plans to close 12 points of purchase in North America.
British-Australian mining company Rio Tinto (+18%) announced about its plans in the nearest future to cut 14 thousand working places. Besides, the Company is going to take its money out of some of the assets and cut the volume of quarter expenses in 2009 from $9 planned before to $4 bln.
The oil prices consolidated according to the results of today’s trades. Data about the crude oil stores turned out to be mixed: the oil stores grew less than the market analysts have expected while he petrol stores turned out to be higher than it has been expected. “Black gold” increased by 4.3% to $43.89 per barrel.

Closing bell of the stock market:

Nikkei +66.82 +0.8%  8,395.87
Topix +5.86 +0.7% 817.94
FTSE    +81.20    +1.89%    4,381.26
DAX    +63.23    +1.34%    4,779.11
CAC     +50.32  +1.55%     3,297.80
Dow    -242.85    -2.72%    8,691.33
NASDAQ    -24.40    -1.55%    1,547.34
S&P    -21.03    -2.31%    888.67
10yr Note    -0.6500    -0.238%    2.669%
NYMEX Crude Oil    -1.64    -3.75%    42.07
Gold    +4.90    +0.64%    774.20

On Tuesday Japanese major indices finished the session growing. The indices were supported by the expectations of the investors that the elected US Barack Obama will realize the plan to stimulate the American economy which in its turn will support the economies of other countries. Against this background the securities of some companies of the financial sector went up including the Japanese largest bank Mitsubishi UFJ whose rates rose by 6.5%.
The growth of oil and metal prices supported the stocks of energy and mining companies. The stocks of the copper producer Nippon Mining added 5.8% and the rates of the oil company Inpex Corp. rose by 7.1%. The producer of the game devices Nintendo announced that its sales in advance of the Thanksgiving Day in the USA grew more than twice. Against this background the price of the Nintendo’s securities increased by 4.2%. The stocks of the sea carrier Nippon Yusen went up by 6% against the cost growth of the cargo transportation for the first time during the last two weeks.

European major indices finished Tuesday’s session growing. The investors expect that the measures taken by the governments of the countries to support economies will lead to the positive results.
Besides, the indices were supported by the economic data. The index of the business expectations in December 2008 released today in comparison with November 2008 grew by 8.3 points and made up minus 45.2 points. Meanwhile, the analysts have expected the rate of this index at the level of minus 55 points.
The price of the stocks of the retail company Pinault Printemps Redoute SA owning such trademarks as Gucci, Yves Saint Laurent and Puma grew by 12%, those of the retail operator of the store chain of the British Home Retail Group – by 5.9%, and those of the largest European retailer Carrefour SA – by 4%. The stocks of the German concern Daimler AG gained 4.4%, those of the French second largest Renault SA – by 2.2%, those of the Italian largest car maker Fiat SpA – by 4.8%.
Today national indices grew on 15 out of 18 West European stock markets.

Major indices on Wall Street finished Tuesday’s unstable session growing. All the ten major economic sectors finished the session below zero mark (except the materials sector).
The moods of the investors were negatively influenced by the forecasts of the profit decrease of the American corporations Texas Instruments and FedEx which can become the next victims of the financial crisis.
The Congress keeps solving the issue about financial help to the car makers. The investors are worried that in case of the negative decision of the government “the big three” will have to reduce the working places to cut the expenses.
The investors’ agitation caused the growth of prices on the treasury bonds, which in its turn caused the fall of the profitability of the latter.
FedEx Corp reduced the profit forecast for 2009. The stocks of the company went 14% cheaper. American retail chain Wal-Mart (-$1.73) will pay $54.25 mln to settle down the class action of the Company’s employees.
American producer of the semi-conductors Texas Instruments Inc. (+$0.72) announced that I the IV quarter of 2008 the volume of sales might make up $2.3-2.5 bln instead of $3.07 bln forecast before.
As for the economic statistics which influenced the dynamics of the trading session it is necessary to poit out the release of the data as for number of the non-consummate deals of the housing sales which in October reduced less than it had been expected. The value of the rate made up -0.7%.

Closing bell of the stock market:
Nikkei 225  -115.05 -1.40% 8,397.22
Topix - 7.35 -0.90% 827.47
FTSE    -222.52    -5.19%    4,065.49
DAX    -274.65    -5.88%    4,394.79
CAC    -182.25    -5.59%    3,080.43
Dow    -679.95    -7.70%    8,149.09
NASDAQ    -137.50    -8.95%    1,398.07
S&P    -80.05    -8.93%    816.19
10yr Note    -2.3800    -0.805%    2.719%
NYMEX Crude Oil    -5.15    -9.46%    49.28
Gold    -42.20    -5.15%    776.80

On Monday Japanese stock markets closed with losses due to the apprehensions of losses growth because of the not getting back the credits and unemployment growth. This happened after the bankruptcy of the house building company Morimoto Co. has lead the general number of bankruptcies among the companies whose stocks trade on the stock markets of the country to the postwar record. The stocks of the Mitsubishi Estate Co. – Japanese second largest developer – fell by 5.6%. Japan General Estate Co. collapsed by 14% after the toughening of the budget has made the company to revise the number of vacancies. The stocks of the country’s largest oil-gas company Inpex Corp. lost 4.4% after the announcement about the record fall of the production activity in China which has provoked the apprehensions as for the further reduction of demand for the raw materials. According to the Department of Labor’s data, in October for the first time during this year the reduction of the salaries was observed. Besides, it has become known that the whole string of the companies, namely Toyota Motor Corp. and Sharp Corp., are planning the reduction of the staff. The stocks of the Sanyo Electric Co., the world’s largest accumulators producer, skyrocketed by 8.6% after the Kyodo News’ announcement that the Panasonic Corp. may buy a part of the Company, the controlling interest of which is owned by the investors, the Goldman Sachs Group Inc. being at the top of the list.

On Monday European stock markets suffered losses as well. The record fall of activity in Eurozone and China’s industrial sectors became one more signal of the deepening of the world’s economy recession. The stocks of the ArcelorMittal, the world’s largest steel producer, collapsed by 12%, and those of the British bank Barclays Plc. fell by 6.7% after the announcement about the fall of housing prices in Great Britain to the level of January 2006. The stocks of the BP Plc. and Royal Dutch Shell Plc., the regions largest oil companies, fell by more than 5% after the oil price has reduced to $50 per barrel. The stocks of the BHP Billiton Ltd., the world’s largest mining company, lost 9%, and those of its competitor Rio Tinto Group collapsed by 11% in the course of the reduction of metal prices. The copper supposed to be delivered in March went 1.3% cheaper to $1.6285 per pound.

The trading session on the American stock market closed by a serious reduction of indices. Indices started the first day of December negatively due to the active sales in the goods and commodities sector and weak economic data.
Business activity index in the industrial sector (Nov mfg ISM) in November is 36.2 against 38.9, and the expenses on the building fell by 1.2% in October.
The goods and commodities sector was pressed by the sales on the markets of oil (-6.6% to $50.88 per barrel) and gold (-5.0% to $775.50 per ounce). The oil price collapsed after last week the OPEC made a decision to retain the volumes of the oil production unchanged. In the course of his speech the chairman of the FRS Ben Bernanke the stock indices renewed the session minimums.
The head of the US central bank announced that “the further reduction of the interest rate from the present level of 1% is very likely. But the possibilities to conduct the usual policy of interest rates are restricted”.