300
8th December 2007, 12:52 PM
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The Dow Jones finished up only 5 points on Friday night with November labour results released showing jobs were up 94,000 for the month. This took a bit of wind out of the market as it shows that the economy is growing and not in a recession - yet. Normally this is good news however, as previously mentioned, these labour figures are not made of steel and may well be revised next month; and secondly if the economy is growing, the likelihood of the US fed cutting rates by .50 points decreases next Tuesday. All eyes are waiting on the next Fed move and if there is a rate cut by .25 points, the current climate might see a slight retraction. Investors are really hoping for a .50 points cut which will not go unnoticed once it is released. Volume over the course of the day was pretty steady with the usual last minute flurry of activity and a market rebound during the last 30 mins of trading.
The ASX showed an almost continuous climb on Friday trading ending up 40 points higher. All eyes will be waiting for the US announcements on Tuesday night local time and any movement before hand isn't likely.
As a special note, the US economy appears to be in a slowdown but not yet in a technical recession. Given these tight times and extraordinary circumstances surrounding the sub-prime circus, the US has announced that it is planning a bail-out solution to kick start the economy from a long road of pain. In an extraordinary move, the US Government is planning on intervening market forces and will put a freeze on the rate of interest for those that have been effected by the sub-prime dive. Those lenders with a sub-prime mortgage taken before June 30 this year will be able to have their rate of interest set for a 5 year period. Which will stop concerns of a black hole scenario spreading. As always there are those that are for the idea (mainly those with the loans and investors) and there are those that are opposed suggesting that a recession is just part of business life and it is needed to weed out weaker market practices. This also has implications on the US currency value and that will mean an effect on the price of gold (when the US dollar devalues typically investors run to gold for some cover) and oil. So we have interesting times ahead in the new year. Stay tuned! :)
Just my 2 cents.
The Dow Jones finished up only 5 points on Friday night with November labour results released showing jobs were up 94,000 for the month. This took a bit of wind out of the market as it shows that the economy is growing and not in a recession - yet. Normally this is good news however, as previously mentioned, these labour figures are not made of steel and may well be revised next month; and secondly if the economy is growing, the likelihood of the US fed cutting rates by .50 points decreases next Tuesday. All eyes are waiting on the next Fed move and if there is a rate cut by .25 points, the current climate might see a slight retraction. Investors are really hoping for a .50 points cut which will not go unnoticed once it is released. Volume over the course of the day was pretty steady with the usual last minute flurry of activity and a market rebound during the last 30 mins of trading.
The ASX showed an almost continuous climb on Friday trading ending up 40 points higher. All eyes will be waiting for the US announcements on Tuesday night local time and any movement before hand isn't likely.
As a special note, the US economy appears to be in a slowdown but not yet in a technical recession. Given these tight times and extraordinary circumstances surrounding the sub-prime circus, the US has announced that it is planning a bail-out solution to kick start the economy from a long road of pain. In an extraordinary move, the US Government is planning on intervening market forces and will put a freeze on the rate of interest for those that have been effected by the sub-prime dive. Those lenders with a sub-prime mortgage taken before June 30 this year will be able to have their rate of interest set for a 5 year period. Which will stop concerns of a black hole scenario spreading. As always there are those that are for the idea (mainly those with the loans and investors) and there are those that are opposed suggesting that a recession is just part of business life and it is needed to weed out weaker market practices. This also has implications on the US currency value and that will mean an effect on the price of gold (when the US dollar devalues typically investors run to gold for some cover) and oil. So we have interesting times ahead in the new year. Stay tuned! :)
Just my 2 cents.