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%.

This entry was posted on Wednesday, December 17th, 2008 at 7:49 am and is filed under Finance Review. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.