Many market features performed better than expected last week. First, the stock market has performed better than expected.
Expect negative headlines from the media. It’s easy to believe that all bad news about the credit crunch is now out, but it’s not.
As bad as you feared. Markets hate uncertainty more than anything and regardless of whether it is good or bad news, the fact that surprises are believed to be behind them is a major factor.
Our positive influence has a positive effect. It is not clear if the bad news is behind us.
The US’s better-than-expected inflation figures managed to lift the FTSE by the bootstraps in mid-week. The UK’s benchmark index for leading stocks was down 80 Points that were before the US CPI figures arrived managed to rebound into the black at the close. There were no positive surprises unfortunately The MPC released more negative news about inflation and the growth prospects of the UK economy last week. There are more bank boosting prospects.
As rate cuts were lessened, there was a reversal of financial stock positions. Last year’s biggest losers were HBOS, RBS, Barclays and Lloyds.
Week as mortgage rates rise. Investors may see the upside as the MPC continues to maintain its strict inflation policy.
The downside risk is very limited for the financial sector. Barclays was punished by traders primarily because of indecision about a possible downside risk.
Rights issue Although banking stocks may seem cheap in terms of their dividend yields at the moment, investors still have to be aware of how affordable they are.
Bear Stearns and Northern Rock looked at the wall before they got there.
Last week, oil stocks led the market higher as oil reached a record-breaking $127. Over the week, the Nasdaq performed well with Researching In Motion, a Blackberry maker, announces that it will release a challenge for the Iphone. Yahoo was also interested in the potential news.
A boardroom fight could bring the Microsoft deal back to life.
The data front is light next week with little to no news until Tuesday, when we get US sentiment data and the US PPI figure.
midday. Wednesday will see the release of minutes from the last MPC Meeting; home owners and analysts alike will be eager to find out how close they were.
This was the actual reason for week’s decision not to change rates. The housing market will be impacted more by the release of minutes from the FOMC’s last meeting.
Market continues to slide Unfortunately, the US housing market is not at its bottom. Single-family housing construction dropped to its lowest level in April In 17 years, it has been at its lowest level. Jason Goepfert recently highlighted two indicators that indicate the upside potential for US equities is limited.
One reason could be the unusually low volume of US markets. Monday, the 12th, saw the lowest volume in 2008 at the New York Stock Exchange. Since 1980 is the most volume-sensitive year. This is especially true in summer when traders are on holiday. The volume actually drops to the second half of the year.
Day has only occurred twice between January and June since 1980, and both times the market did not make any further progress for at most 9 months. Secondly Sentiment studies show that there is a lot of dumb money buying into this rally. This alone does not necessarily indicate a crash but it could at least signal one.
The upside might not be so spectacular if you wait for a few months.
BetOnMarkets.com traders say that the following trade could be profitable. Place a No Touch Trade on the S&P 500.
The next 120 days could see a return of 14%. This puts the no touch level at 14% above the last year’s high, but leaves some room for upside.
