Brekky Edition 26/1

[300]

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Happy Australia Day to all (and for those not fortunate enough to celebrate Happy Saturday to you).

The Dow Jones finished Friday's trading down another 171 points. The rise and falls are commonplace in most stocks after large movements in price as they find their new price. According to some analysts, this is seen as positive market involvement as investors appear to not let the US Market drop further - seeing the current levels attractive to buy in, then take profits and sell out. This appears to be the explanation for Friday's drop. There is some big news coming next week with Bush set to deliver his State of the Union on Monday and the US Fed will hold it first regular meeting for the year on Tuesday and Wednesday. My current thoughts are that the news from Bush will not be great and that the Fed will then decrease rates by .5 of a percent. The expected market reaction will be a drop from the bad news delivered from Bush and once the Fed drops rates, a sharp increase. The sell off on Friday will allow investors some money in the bank to buy in at the end of Monday/Tuesday and then make some profits on Wednesday then sell off again on Thursday/Friday.

The ASX rose over 280 points on Friday following three straight days of large gains in the US. With Monday being a public holiday, the ASX will resume on Tuesday and should already know the Bush speech contents. With the news known already (and if it is bad) I would be thinking that Tuesday will not be a portfolio inflating day.

The RA Portfolio is sitting on the bench for the moment with just over $1600 in the bank. I will hunt around for some stocks to buy into (PRE still looks good to me!) and we will see how it rides out.
Just my 2 cents.

[Aukiman]

yeah I heard China was very worried about the US slide the other day, so much tied up in investments !

[300]

Correcto, it is in the best interests of China (and bizzarely enough Saudi Arabia also) to make sure the that US economy doesn't collapse. We saw a hint of the importance of these ties in October when a Saudi (can get the name if needed) bailed out Citicorp (US Bank) by loaning it 11 billion. There are a lot of eyes on the state of the US economy and I will put in some more of the good stuff on Tuesday (there's the unneeded plug!) but lets say that the prognosis isn't good.

All that said and done, the market is cyclical and all good things do have to come to an end at some time. This downturn will sort out the unhealthy companies and the market will emerge rather robust - it just might take a couple of years.

[blackberry]

lots of stuff on the news lately about the shift in economic might to nations such as india and china nowadays. Hope we dont get left behind, not that Oz is a dominant global power in that respect anyways I guess

[300]

Yeah, weird times!! Following that way of thinking..... do we then use the strongest economy on Earth as the bench for that time period?? In which case how do we transition from one economy to another?? Fair enough that the US is heading for (my opinion is that it is in) a recession but that might just mean that everyone appears to be doing well compared to the US. The recession is part of the business cycle and it isn't comfortable. So it is a global cross-roads currently. Do we keep the US as the main bench or do we move away and if we move away, how is that done??
Interesting times, interesting times!!!!