The summer has come to an end, and so has the market slump that came with it. With little on tap to challenge the recent rally, stocks are on track to close September with the biggest monthly gains in over a year.
Though September is typically down month on Wall Street and the economic recovery remains sluggish, investors have taken cues from recent upbeat economic news to propel major indexes sharply higher during the month after a sell-off in August.
"We've been seeing modestly favorable economic numbers lately, which has allowed markets to keep moving up," said Stephen Carl, head equity trader at Williams Capital Group.
So far, the Dow has rallied 8.4%, which would be the best monthly gain since July 2009, when the blue-chip index added 8.6%. The latest lift also puts the Dow on track for its best September since 1939, when it rose 13.5%.
The S&P has rallied 9.5%, the largest increase since April 2009, and the Nasdaq has surged 12.6%, the biggest jump since October 2002.
Last week, stocks rose more than 2% after the major indexes broke above key technical levels early in the week. That encouraged investors to keep the momentum going, and stocks ended with a rally to fresh four-month highs.
Though the economy is still not out of the woods, analysts don't foresee a pullback in stocks in the week ahead.
"We've got a frilly light week ahead in economic data until the last couple of days, and as long those readings come in near expectations, the markets will be able to sustain the recent gains," said Michael Sheldon, chief market strategist at RDM Financial Group.
And even if poor economic news triggers some volatility and puts pressure on stocks, Sheldon said the recent momentum should be enough for investors to close September and the third quarter on a positive note.
On the docket
Monday: There are no market-moving economic or corporate events expected on Monday.
Tuesday: The Case-Shiller 20-city home price index is expected to have increased 3.4% in July after rising 4.2% in June.
After the start of trading, the Conference Board releases its Consumer Confidence index for September. Economists forecast the index to have edged down to 52.9 during the month from 53.5 in August.
Wednesday: The government's weekly oil inventory report is due after the start of trading.
Thursday: The third and final reading on gross domestic product growth in the second quarter is due before the bell. The economy is expected to have expanded at a 1.6% annualized rate, unchanged from the previous reading, and still sharply lower from the initial reading had been for a 2.4% growth rate in the period.
At the same time, the Department of Labor releases a weekly report on jobless claims. The number of Americans filing new claims for unemployment insurance is expected to have decreased to 457,000 last week from 465,000 in the previous week.
Continuing claims, a measure of Americans who have been receiving benefits for a week or more, are expected to have dropped to 4.45 million from 4.49 million claims the previous week.
The Chicago PMI, a regional reading on manufacturing activity, will be released after the bell. The measure is expected to have eased to 56.0 in September from 56.7 in August.
Friday: A government report on personal income and spending is due before the opening bell. Economists surveyed by Briefing.com expect income to have edged up 0.3% in August after rising 0.2% in July. Spending is forecast to tick up 0.3% after increasing 0.4%.
The University of Michigan's final reading on consumer sentiment in September is due shortly after the market open. It's expected to inch up to 67.1 from the last reading 66.6.
The Institute for Supply Management's (ISM) index of manufacturing is also due after the start of trading. Economists forecast the index to have slipped to 54.5 in September from 56.3 in August. Any number above 50 indicates growth in the sector.
Meanwhile, the government is expected to report that construction spending fell 0.5% in August, after dropping 1% in July.
Auto and truck sales for September are due throughout the day.
Saturday, September 25, 2010
US Credit Union Trade Groups Praise NCUA Rescue Plan
WASHINGTON (Dow Jones)--Two major trade associations for the credit union industry tentatively praised the rescue plan unveiled by federal regulators Friday for the nation's so-called wholesale credit unions.
The National Credit Union Administration announced the plan, which aims to stabilize a crucial part of the credit-union industry battered by losses on risky subprime mortgage-backed securities. As part of the effort, the regulator announced a plan to manage $50 billion of troubled assets inherited from failed institutions. NCUA plans to issue $30 billion to $35 billion in government-guaranteed bonds, backed by the shaky mortgage-related assets.
Federal regulators also seized three wholesale credit unions, bringing to five the number of wholesale institutions deemed by the government to be not financially viable.
Fred Becker, president of the National Association of Federal Credit Unions, called the seizure of the three corporate credit unions "very unfortunate."
But he praised the final version of new rules governing the corporate credit unions, also approved Friday, and the plan announced by NCUA to deal with troubled assets.
Both items were "not only as we expected, but as we had advocated on behalf of federal credit unions," Becker said.
On the troubled asset plan, NAFCU's members were particularly interested to have the bonds backed by the troubled assets backed by the government and for credit unions to be able to buy the bonds, he said.
"There are some potentially positive aspects for credit unions in the actions that NCUA has taken, the biggest being that credit unions will only have to cover the actual, eventual credit losses--and nothing else, including market losses," said Bill Cheney, president and chief executive of the Credit Union National Association.
Both officials said they needed time to digest the news fully.
NCUA estimates that total future assessments on the credit union industry to recoup losses from the troubled assets will range from $7 billion to $9.2 billion, which will be spread out over about 10 years.
That's a longer timeframe than credit unions originally expected, and it was approved by Treasury Secretary Timothy Geithner as part of the overall rescue plan.
"While nobody wants to pay the assessments, [the longer timeframe] will make the assessments much more palatable for the industry as a whole," said NAFCU's Becker in an interview.
"Credit unions can and will absorb the expense," said CUNA's Cheney. "They have the resources to do so, as they are generally well capitalized. Consumers will not feel any impact."
-By Victoria McGrane, Dow Jones Newswires; 202-862-9267; victoria.mcgrane@dowjones.com.
The National Credit Union Administration announced the plan, which aims to stabilize a crucial part of the credit-union industry battered by losses on risky subprime mortgage-backed securities. As part of the effort, the regulator announced a plan to manage $50 billion of troubled assets inherited from failed institutions. NCUA plans to issue $30 billion to $35 billion in government-guaranteed bonds, backed by the shaky mortgage-related assets.
Federal regulators also seized three wholesale credit unions, bringing to five the number of wholesale institutions deemed by the government to be not financially viable.
Fred Becker, president of the National Association of Federal Credit Unions, called the seizure of the three corporate credit unions "very unfortunate."
But he praised the final version of new rules governing the corporate credit unions, also approved Friday, and the plan announced by NCUA to deal with troubled assets.
Both items were "not only as we expected, but as we had advocated on behalf of federal credit unions," Becker said.
On the troubled asset plan, NAFCU's members were particularly interested to have the bonds backed by the troubled assets backed by the government and for credit unions to be able to buy the bonds, he said.
"There are some potentially positive aspects for credit unions in the actions that NCUA has taken, the biggest being that credit unions will only have to cover the actual, eventual credit losses--and nothing else, including market losses," said Bill Cheney, president and chief executive of the Credit Union National Association.
Both officials said they needed time to digest the news fully.
NCUA estimates that total future assessments on the credit union industry to recoup losses from the troubled assets will range from $7 billion to $9.2 billion, which will be spread out over about 10 years.
That's a longer timeframe than credit unions originally expected, and it was approved by Treasury Secretary Timothy Geithner as part of the overall rescue plan.
"While nobody wants to pay the assessments, [the longer timeframe] will make the assessments much more palatable for the industry as a whole," said NAFCU's Becker in an interview.
"Credit unions can and will absorb the expense," said CUNA's Cheney. "They have the resources to do so, as they are generally well capitalized. Consumers will not feel any impact."
-By Victoria McGrane, Dow Jones Newswires; 202-862-9267; victoria.mcgrane@dowjones.com.
Stock What Does Stock Mean?
A security that represents ownership in a corporation and has claims on part of the corporation's assets and earnings per share. There are two main types of stock: (1) common and (2) preferred. (1) Common stock usually entitles the owner to vote at shareholders' meetings and receive dividends when applicable. (2) Preferred stock generally does not include voting rights but has a priority claim on assets and earnings ahead of common shares. For example, owners of preferred stock receive dividends before common shareholders do and are in the front of the line if a company goes bankrupt and is liquidated. Also known as shares or equity.
Investopedia explains Stock
A stockholder (a shareholder) has a claim to part of the corporation's assets and earnings. In other words, a shareholder is an owner of the company. Ownership is determined by the number of shares a person owns relative to the number of outstanding shares. For example, if a company has 1,000 shares of stock outstanding and an investor owns 100 shares, that investor owns and has a claim to 10% of the company's assets. Stocks are a major component of investor portfolios because historically they outperform most other investments over the long run.
Investopedia explains Stock
A stockholder (a shareholder) has a claim to part of the corporation's assets and earnings. In other words, a shareholder is an owner of the company. Ownership is determined by the number of shares a person owns relative to the number of outstanding shares. For example, if a company has 1,000 shares of stock outstanding and an investor owns 100 shares, that investor owns and has a claim to 10% of the company's assets. Stocks are a major component of investor portfolios because historically they outperform most other investments over the long run.
NYSE stocks posting largest volume decreases
Related Quotes
On Friday September 24, 2010, 6:04 pm EDT
NEW YORK (AP) -- A look at the 10 biggest volume decliners on New York Stock Exchange at the close of trading: : :Advanced Micro Devices Inc. rose 11.8 percent to $6.12 with 145,661,200 shares traded.
Bank of America Corp. rose 1.5 percent to $13.40 with 718,022,200 shares traded.
Citigroup Inc. rose 1.2 percent to $3.95 with 1,868,108,000 shares traded.
EMC Corp. rose 5.2 percent to $20.57 with 132,195,500 shares traded.
Ford Motor Co. rose .6 percent to $12.49 with 247,811,100 shares traded.
General Electric Co. rose 2.3 percent to $16.29 with 283,646,400 shares traded.
Motorola Inc. rose 3.6 percent to $8.38 with 107,006,500 shares traded.
Pfizer Inc. rose 2.0 percent to $17.06 with 197,687,100 shares traded.
Qwest Communications International Inc. rose 1.1 percent to $6.18 with 162,031,900 shares traded.
Wells Fargo & Co. rose 1.6 percent to $26.01 with 198,269,300 shares traded
Ford Venture to Spend $500 Million to Construct Plant in Chongqing, China bloomberg
China venture Changan Ford Mazda Automobile Co. signed an agreement with the Chongqing municipal government to spend $500 million to build an engine plant in the western Chinese city of Chongqing.
The planned plant will more than double Ford’s existing engine capacity in China, according to an e-mailed statement from the company.
The engine factory will be Changan Ford Mazda Automobile’s second and will add capacity of 400,000 units, according to the statement. The plant will mainly supply the venture’s vehicle- assembly lines in Chongqing, it said.
Construction will begin next year and engine production will start in 2013, Ford said in the statement.
Changan Ford Mazda Automobile is a venture between Chongqing Changan Automobile Co., Ford and Mazda Motor Corp.
To contact the editor responsible for this story: Stanley James at sjames8@bloomberg.net
The planned plant will more than double Ford’s existing engine capacity in China, according to an e-mailed statement from the company.
The engine factory will be Changan Ford Mazda Automobile’s second and will add capacity of 400,000 units, according to the statement. The plant will mainly supply the venture’s vehicle- assembly lines in Chongqing, it said.
Construction will begin next year and engine production will start in 2013, Ford said in the statement.
Changan Ford Mazda Automobile is a venture between Chongqing Changan Automobile Co., Ford and Mazda Motor Corp.
To contact the editor responsible for this story: Stanley James at sjames8@bloomberg.net
Regulators shut banks in Florida, Washington state
WASHINGTON (AP) -- Regulators on Friday shut down small banks in Florida and Washington state, bringing to 127 the number of U.S. bank failures this year on a wave of loan defaults and economic distress.
The Federal Deposit Insurance Corp. took over Haven Trust Bank Florida of Ponte Vedra Beach, Fla., with $148.6 million in assets and $133.6 million in deposits, and North County Bank, based in Arlington, Wash., with $288.8 million in assets and $276.1 million in deposits.
First Southern Bank, based in Boca Raton, Fla., agreed to assume the assets and deposits of Haven Trust Bank Florida. In addition, the FDIC and First Southern Bank agreed to share losses on $127.3 million of Haven Trust Bank Florida's loans and other assets.
Whidbey Island Bank, based in Coupeville, Wash., is acquiring the assets and deposits of North County Bank. The FDIC and Whidbey Island Bank agreed to share losses on $221.9 million of North County Bank's assets.
The failure of North County Bank is expected to cost the deposit insurance fund $72.8 million.
The failure of Haven Trust Bank Florida is expected to cost the fund $31.9 million. It was the 24th bank in Florida to fail this year.
Florida is among the hardest hit states for bank collapses, as the meltdown in the real estate market brought an avalanche of soured mortgage loans. Also high on the list of failure-heavy states are California, Georgia and Illinois.
With 127 closures nationwide so far this year, the pace of bank failures exceeds that of 2009, which was already a brisk year for shutdowns. By this time last year, regulators had closed 95 banks.
The pace has accelerated as banks' losses mount on loans made for commercial property and development. Many companies have shut down in the recession, vacating shopping malls and office buildings financed by the loans. That has brought delinquent loan payments and defaults by commercial developers.
The number of bank failures is expected to peak this year and be slightly higher than the 140 that fell in 2009. That was the highest annual tally since 1992, at the height of the savings and loan crisis. The 2009 failures cost the insurance fund more than $30 billion. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three succumbed in 2007.
The growing bank failures have sapped billions of dollars out of the deposit insurance fund. It fell into the red last year, and its deficit stood at $20.7 billion as of June 30.
The number of banks on the FDIC's confidential "problem" list jumped to 829 in the second quarter from 775 three months earlier, even as the industry as a whole had its best quarter since 2007, making $21.6 billion in net income. Banks with more than $10 billion in assets -- only 1.3 percent of the industry -- accounted for $19.9 billion of the total earnings.
The FDIC expects the cost of resolving failed banks to total around $60 billion from 2010 through 2014.
The agency mandated last year that banks prepay about $45 billion in premiums, for 2010 through 2012, to replenish the insurance fund.
Depositors' money -- insured up to $250,000 per account -- is not at risk, with the FDIC backed by the government. That insurance cap was made permanent in the financial overhaul law enacted in July.
The Federal Deposit Insurance Corp. took over Haven Trust Bank Florida of Ponte Vedra Beach, Fla., with $148.6 million in assets and $133.6 million in deposits, and North County Bank, based in Arlington, Wash., with $288.8 million in assets and $276.1 million in deposits.
First Southern Bank, based in Boca Raton, Fla., agreed to assume the assets and deposits of Haven Trust Bank Florida. In addition, the FDIC and First Southern Bank agreed to share losses on $127.3 million of Haven Trust Bank Florida's loans and other assets.
Whidbey Island Bank, based in Coupeville, Wash., is acquiring the assets and deposits of North County Bank. The FDIC and Whidbey Island Bank agreed to share losses on $221.9 million of North County Bank's assets.
The failure of North County Bank is expected to cost the deposit insurance fund $72.8 million.
The failure of Haven Trust Bank Florida is expected to cost the fund $31.9 million. It was the 24th bank in Florida to fail this year.
Florida is among the hardest hit states for bank collapses, as the meltdown in the real estate market brought an avalanche of soured mortgage loans. Also high on the list of failure-heavy states are California, Georgia and Illinois.
With 127 closures nationwide so far this year, the pace of bank failures exceeds that of 2009, which was already a brisk year for shutdowns. By this time last year, regulators had closed 95 banks.
The pace has accelerated as banks' losses mount on loans made for commercial property and development. Many companies have shut down in the recession, vacating shopping malls and office buildings financed by the loans. That has brought delinquent loan payments and defaults by commercial developers.
The number of bank failures is expected to peak this year and be slightly higher than the 140 that fell in 2009. That was the highest annual tally since 1992, at the height of the savings and loan crisis. The 2009 failures cost the insurance fund more than $30 billion. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three succumbed in 2007.
The growing bank failures have sapped billions of dollars out of the deposit insurance fund. It fell into the red last year, and its deficit stood at $20.7 billion as of June 30.
The number of banks on the FDIC's confidential "problem" list jumped to 829 in the second quarter from 775 three months earlier, even as the industry as a whole had its best quarter since 2007, making $21.6 billion in net income. Banks with more than $10 billion in assets -- only 1.3 percent of the industry -- accounted for $19.9 billion of the total earnings.
The FDIC expects the cost of resolving failed banks to total around $60 billion from 2010 through 2014.
The agency mandated last year that banks prepay about $45 billion in premiums, for 2010 through 2012, to replenish the insurance fund.
Depositors' money -- insured up to $250,000 per account -- is not at risk, with the FDIC backed by the government. That insurance cap was made permanent in the financial overhaul law enacted in July.
U.S. State Officials Investigate After GMAC Halts Evictions Bloomberg
Sept. 25 (Bloomberg) -- Attorneys general in three U.S. states are investigating foreclosures at Ally Financial Inc.’s GMAC Mortgage unit after the lender said it would halt some evictions following a discovery of faulty documentation.
To contact the reporter on this story: Dakin Campbell in San Francisco at dcampbell@bloomberg.net.
To contact the editor responsible for this story: Alec McCabe at amccabe@bloomberg.net.
Texas, Iowa and Illinois have started investigations into mortgage practices at Ally, while California, which isn’t affected by GMAC’s action, ordered the company to stop foreclosures unless it can prove compliance with state law, according to statements. Ally said it has issued a “more robust policy” on processing foreclosures, increased staff to handle documents and instituted more training for employees.
“Preserving the integrity of the foreclosure process is of the utmost importance,” Ally said yesterday in a statement. “While we are exercising an abundance of caution in the review process, we are confident that the processing errors did not result in any inappropriate foreclosures.”
Ally, the Detroit-based auto and home lender run by Chief Executive Officer Michael Carpenter, faces allegations that its GMAC unit evicted homeowners without verifying that borrowers actually defaulted or that the firm had legal standing to seize the homes. GMAC Mortgage notified agents and brokers on Sept. 17 that it had suspended evictions in 23 states.
Ally said this week it found a “technical” defect in its foreclosure process. Employees signed affidavits without a notary present or with information they didn’t personally know was true. The company said the information in the documents was “factually accurate.”
‘Massive Defects’
“We’re seeing and hearing massive defects across the industry,” said David Lykken, president of Mortgage Banking Solutions, an Austin, Texas-based consulting firm. “What’s going on at GMAC is endemic.”
Ally didn’t say how much more staff it added to process foreclosures. The unit was sanctioned for similar procedures in 2006, ordered to submit an explanation and confirmation that the policies were changed and told to pay defendants’ legal costs of $8,135.55, court documents show.
Iowa Attorney General Thomas Miller, who leads an 11-state working group of attorneys general and bank examiners exploring ways to prevent foreclosures, opened an investigation Thursday. Texas Attorney General Greg Abbott started a probe earlier this month. Illinois Attorney General Lisa Madigan said the company may have violated the state’s consumer fraud act, and demanded a meeting and information, according to a statement.
California Attorney General Jerry Brown said yesterday that “prior to resuming foreclosures here, the company must prove that it’s following the letter of the law,” according to a statement.
Corrected
Ally said in its statement that the defect was identified and corrected “a few months ago” and that it expects to resolve the “vast majority” of cases by the end of the year.
Ally told mortgage-finance company Freddie Mac about the potential for faulty foreclosures weeks before halting its own evictions, according to two people briefed on the matter. Ally informed Freddie Mac on Aug. 25 that affidavits for court proceedings might not be valid, according to a person with direct knowledge of the matter.
By Sept. 1, Freddie Mac had notified its lawyers and stopped related foreclosures and evictions, said the person, who declined to be identified because the matter hasn’t been formally disclosed.
Fannie Mae, the largest government-backed mortgage firm, said it told lawyers of flaws in GMAC documentation after it was alerted. Fannie Mae spokesman Brian Faith declined to say when GMAC contacted the Washington-based company.
U.S. Bailout
Ally, Freddie Mac and Fannie Mae are majority-owned by the U.S. government, which has been pressing lenders to reduce foreclosures as evictions hit record levels. Ally is the beneficiary of more than $17 billion in U.S. bailout funds, and the U.S. holds a 56.3 percent stake.
Ally declined to say how many loans may be affected. The firm, formerly known as GMAC Inc., ranked fourth among U.S. home-loan originators in the first six months of this year with $26 billion, and fifth among loan servicers, with a $349.1 billion portfolio, according to Inside Mortgage Finance, an industry newsletter.
Servicers conduct billing and collections on mortgages, sometimes for other firms that actually own the loans, and handle foreclosures when borrowers default.
Florida Attorney General William McCollum said last month he was investigating three Florida law firms handling foreclosures.
Lawyers
In a letter to Fannie Mae Chief Executive Officer Michael J. Williams, House Financial Services Committee Chairman Barney Frank of Massachusetts and two other Democrats on the panel questioned the firm’s selection of lawyers and servicers to manage its loans.
“Fannie Mae seems to specifically delegate its foreclosure avoidance obligations out to lawyers who specialize in kicking people out of their homes,” the lawmakers wrote in the letter. “The legal pressure to foreclose at all costs is leading to a situation where servicers are foreclosing on properties on which they do not even own the note.”
Representatives Alan Grayson and Corrine Brown, both of Florida, joined Frank in signing the letter.
Regulators have initiated reviews of GMAC Mortgage’s foreclosure process. The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, will “take appropriate action,” agency spokesman Stefanie Mullin said.
The Office of the Comptroller of the Currency asked its examiners to talk to their banks about the procedures as part of the agency’s ongoing supervision, spokesman Bryan Hubbard said.
--With assistance from Lorraine Woellert in Washington, Denise Pellegrini in New York, Margaret Cronin Fisk in Detroit and Joel Rosenblatt in San Francisco. Editors: Dan Reichl, Paul Tighe.To contact the reporter on this story: Dakin Campbell in San Francisco at dcampbell@bloomberg.net.
To contact the editor responsible for this story: Alec McCabe at amccabe@bloomberg.net.
riding on a flood of liquidity
MarketWatch NEW YORK (MarketWatch) — It might sound counterintuitive after the rally in stocks so far in September, not to mention in complete contradiction of the prediction of many Wall Street analysts, but the market is not betting on a USor even a global recovery, for that ...
But with retail investors mostly absent from the market, as they have been for the past two years, investment powerhouses are again relying on the same old trick that helped power stocks in March 2009.
What the market is betting on is lots more liquidity coming its way.
Faced with increasing signs of economic weakness, central banks in the U.S., Japan, and the European Union are stopping plans to remove liquidity, signaling more liquidity is on the way, or already intervening.
That’s a blessing for stocks, commodities, and gold.
Given the macro-nature of the global financial and economic crisis, assets have been increasingly trading in lock-step, meaning either risk on-type of assets such as stocks and commodities when things look up, or risk-off assets such as bonds, when things look down.
Renewed central bank moves towards liquidity are a clear green light:
“This is very much a risk-on environment given the ample liquidity,” says Mary Nicola, currency strategist at BNP Paribas.
But that’s very far from the market signaling it expects the economy to recover.
This past week the Federal Reserve summed it up nicely when it said it was worried about deflation and that it stood ready to take more extraordinary measures to reflate the economy.
Other central bank moves are also tell-tale signs. Earlier this month, the Bank of Korea unexpectedly left interest rates on hold, even though its economy is improving.
The European Central Bank, meanwhile, left in place programs to help boost liquidity.
And then in the past week, the Bank of Japan conducted its first intervention to pressure the yen in six years, through an “unsterilized” intervention that added to global liquidity.
Nobody wants a strong currency anymore, with exports appearing to be the only way out of the slump, as is also becoming evident with the increased pressure on China to devalue its artificially low currency and the dollar hitting multi-year lows against many emerging-market currencies.
No wonder that gold, which acts as a safe-haven against depreciating currencies, especially the dollar, is hitting new highs.
But more broadly, for stocks, the all-clear signal is on until the Fed next meets in November. And if the economy and inflation continue to weaken in the meantime, it’s all the more reason to rally.
NEW YORK (MarketWatch) — It might sound counterintuitive after the rally in stocks so far in September, not to mention in complete contradiction of the prediction of many Wall Street analysts, but the market is not betting on a U.S.or even a global recovery, for that matter.
That might sound hard to believe given that the Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 10,860, +197.84, +1.86%) is up 8.4% so far this month, the tech-heavy Nasdaq Composite /quotes/comstock/10y!i:comp (COMP 2,381, +54.14, +2.33%) is up 12.6%, and the S&P 500 index /quotes/comstock/21z!i1:in\x (SPX 1,149, +23.84, +2.12%) , the broad gauge of the market most used by investment professionals, is up 9.5%.
In normal circumstances, this would be the type of rally that signals investors are betting the “all clear” on stocks, given a bright outlook for economic growth and profits. But with retail investors mostly absent from the market, as they have been for the past two years, investment powerhouses are again relying on the same old trick that helped power stocks in March 2009.
What the market is betting on is lots more liquidity coming its way.
Faced with increasing signs of economic weakness, central banks in the U.S., Japan, and the European Union are stopping plans to remove liquidity, signaling more liquidity is on the way, or already intervening.
That’s a blessing for stocks, commodities, and gold.
Given the macro-nature of the global financial and economic crisis, assets have been increasingly trading in lock-step, meaning either risk on-type of assets such as stocks and commodities when things look up, or risk-off assets such as bonds, when things look down.
Renewed central bank moves towards liquidity are a clear green light:
“This is very much a risk-on environment given the ample liquidity,” says Mary Nicola, currency strategist at BNP Paribas.
But that’s very far from the market signaling it expects the economy to recover.
This past week the Federal Reserve summed it up nicely when it said it was worried about deflation and that it stood ready to take more extraordinary measures to reflate the economy.
Other central bank moves are also tell-tale signs. Earlier this month, the Bank of Korea unexpectedly left interest rates on hold, even though its economy is improving.
The European Central Bank, meanwhile, left in place programs to help boost liquidity.
And then in the past week, the Bank of Japan conducted its first intervention to pressure the yen in six years, through an “unsterilized” intervention that added to global liquidity.
Nobody wants a strong currency anymore, with exports appearing to be the only way out of the slump, as is also becoming evident with the increased pressure on China to devalue its artificially low currency and the dollar hitting multi-year lows against many emerging-market currencies.
No wonder that gold, which acts as a safe-haven against depreciating currencies, especially the dollar, is hitting new highs.
But more broadly, for stocks, the all-clear signal is on until the Fed next meets in November. And if the economy and inflation continue to weaken in the meantime, it’s all the more reason to rally.
Nick Godt is MarketWatch's markets editor, based in New York.
Ford to open new engine plant in China
Companies:Ford Motor Co.Topics:International.Related Quotes
Symbol Price Change
F 12.56 +0.25
They signed a memorandum of understanding with the city of Chongqing on Saturday.
Construction is to begin next year with engine production starting in 2013. The plant can make 400,000 engines annually; more than double the partnership's existing engine capacity in China.
The partnership operates two assembly plants in China, including one in Chongqing. It is building a third to produce the Ford Focus.
Dearborn, Mich.-based Ford is the 11th-ranked brand by sales in the Chinese market, but its sales have risen dramatically since it entered the country in 2003. Ford and its partners have sold 368,103 vehicles in China through August, an increase of 42 percent from a year ago.
On Saturday September 25, 2010, 12:08 pm EDT
CHONGQING, China (AP) -- Ford and Chinese partner, Changan Ford Mazda Automobile Ltd., plan to build a $500 million engine plant in China.
They signed a memorandum of understanding with the city of Chongqing on Saturday.
Construction is to begin next year with engine production starting in 2013. The plant can make 400,000 engines annually; more than double the partnership's existing engine capacity in China.
The partnership operates two assembly plants in China, including one in Chongqing. It is building a third to produce the Ford Focus.
Dearborn, Mich.-based Ford is the 11th-ranked brand by sales in the Chinese market, but its sales have risen dramatically since it entered the country in 2003. Ford and its partners have sold 368,103 vehicles in China through August, an increase of 42 percent from a year ago.
Symbol Price Change
F 12.56 +0.25
On Saturday September 25, 2010, 12:08 pm EDT
CHONGQING, China (AP) -- Ford and Chinese partner, Changan Ford Mazda Automobile Ltd., plan to build a $500 million engine plant in China.They signed a memorandum of understanding with the city of Chongqing on Saturday.
Construction is to begin next year with engine production starting in 2013. The plant can make 400,000 engines annually; more than double the partnership's existing engine capacity in China.
The partnership operates two assembly plants in China, including one in Chongqing. It is building a third to produce the Ford Focus.
Dearborn, Mich.-based Ford is the 11th-ranked brand by sales in the Chinese market, but its sales have risen dramatically since it entered the country in 2003. Ford and its partners have sold 368,103 vehicles in China through August, an increase of 42 percent from a year ago.
On Saturday September 25, 2010, 12:08 pm EDT
CHONGQING, China (AP) -- Ford and Chinese partner, Changan Ford Mazda Automobile Ltd., plan to build a $500 million engine plant in China.
They signed a memorandum of understanding with the city of Chongqing on Saturday.
Construction is to begin next year with engine production starting in 2013. The plant can make 400,000 engines annually; more than double the partnership's existing engine capacity in China.
The partnership operates two assembly plants in China, including one in Chongqing. It is building a third to produce the Ford Focus.
Dearborn, Mich.-based Ford is the 11th-ranked brand by sales in the Chinese market, but its sales have risen dramatically since it entered the country in 2003. Ford and its partners have sold 368,103 vehicles in China through August, an increase of 42 percent from a year ago.
Monday, September 20, 2010
Thursday, September 16, 2010
NEXT GEN CONSOLE FOOTBALL GAME ENGINE ARRIVES FOR EA SPORTS FIFA 11 PC
"The EA SPORTS FIFA franchise is committed to investing and innovating for PC and this is a watershed moment," said Executive Producer Kaz Makita. "We are delivering to FIFA 11 PC the high quality gameplay, innovative game modes and stunning graphics that have made FIFA the highest rated sports game on the PlayStation3 and Xbox 360 and winner of over 50 sports game of the year awards."
The physics-based, data-driven technology behind the EA SPORTS football engine has been optimised for PC to deliver true freedom on the pitch with individuality of player control and movement, sophisticated ball touches, and physical interaction between players. FIFA 11 PC will feature the market-leading true 360° dribbling system that gives players precise control of the ball and next generation animation technology that delivers Skilled Dribbling, enabling skilled dribblers to face defenders and use highly responsive lateral dribbling to skip past them. Plus, Physical Play has been improved using collision sharing, creating a varied, less predictable, and extended fight for possession between players.
FIFA 11 PC features and game modes will be revealed in the coming weeks and months.
FIFA 11 will be available in stores Oct. 1 across Europe and Asia for the PlayStation®3, Xbox 360®, WiiTM, PC, PlayStation®2 computer entertainment system, Nintendo DSTM, PSP® (PlayStation®Portable) system and mobile. The game has not yet been rated
Download Free Here From Ea PC
Toshiba Satellite L645D-S4036 LED TruBrite 14-Inch Laptop (Black)
LG 47LX6500 47-Inch 3D 1080p 240 Hz LED Plus LCD HDTV
LG 47LX6500 47-Inch 3D 1080p 240 Hz LED Plus LCD HDTV
Uefa Results
Matchday 1 : 14-15 September 2010
14 September 2010
| A |  | Twente | 2-2 | Internazionale |  | Full time » |
| ||||||
| A |  | Bremen | 2-2 | Tottenham |  | Full time » |
| ||||||
| B |  | Lyon | 1-0 | Schalke |  | Full time » |
| ||||||
| B |  | Benfica | 2-0 | H. Tel-Aviv |  | Full time » |
| ||||||
| C |  | Man. United | 0-0 | Rangers |  | Full time » |
| ||||||
| C |  | Bursaspor | 0-4 | Valencia |  | Full time » |
| ||||||
| D |  | Barcelona | 5-1 | Panathinaikos |  | Full time » |
| ||||||
| D |  | København | 1-0 | Rubin |  | Full time » |
|
15 September 2010
| E |  | Bayern | 2-0 | Roma |  | Full time » |
| ||||||
| E |  | CFR Cluj | 2-1 | Basel |  | Full time » |
| ||||||
| F |  | Marseille | 0-1 | Spartak Moskva |  | Full time » |
| ||||||
| F |  | Žilina | 1-4 | Chelsea |  | Full time » |
| ||||||
| G |  | Real Madrid | 2-0 | Ajax |  | Full time » |
| ||||||
| G |  | Milan | 2-0 | Auxerre |  | Full time » |
| ||||||
| H |  | Arsenal | 6-0 | Braga |  | Full time » |
| ||||||
| H |  | Shakhtar Donetsk | 1-0 | Partizan |  | Full time » |
|
Subscribe to:
Posts (Atom)