Market Briefing for 02/18/2009
Wednesday, February 18, 2009
Obama Signs the Bill, the U.S stock markets plunge
After a long weekend, the U.S stock markets experienced yet again selling pressure following Friday’s momentum. The major U.S indices dropped at the opening bell, gapping down to close the session in red. In one of their worst trading days, the S&P500 closed the session down by over 4.5%, while the NASDAQ plummeted by over 4%. Even though the major indices tried to gain back some of their intraday losses, the last half an hour of trading presented additional selling pressure, sending the indices to their lowest levels of the day.
Charm and charisma didn’t help the new president yesterday in his speech following the signing of the enormous stimulus package. Investors looked beyond the presidents words stating that the stimulus will put the economic on a “firmer foundation”, as economic headlines continued to show perishing companies. While the president has stated numerous times in the past that the stimulus plan will take time to leak through the economy, investors now seem to be turning their shoulder, looking for a better solution to put the economy back on the right path.
Economic data continued to paint a gloomy picture as the calendar showed that the Empire State Manufacturing Index plunged to a -34.70 figure. Even though the NAHB housing market index increased slightly more than expected, it wasn’t enough to hold the indices giving them support. Other economies economic data also continued to weigh on consumer sentiment as Australia’s Retail Sales dropped by 0.80% while their leading index showed a negative figure of -0.4%. The surprising figure came from England as their inflation rate came out higher than what analysts had expected.
Economic news continued to flood the markets following the U.S close, as the two giants Chrysler and General Motors, both released notes that they are in need for further funds. Chrysler approached the government for another $2 billion in loans, while General Motors said that it could need up to $30 billion from the Treasury Department. Both the companies stated that should they not receive the funds, Bankruptcy could cost taxpayers much more in the long run, due to the enormous job losses.
On the Forex market, the Dollar index raced forward breaking recent resistance. As shown on previous reports the Dollar index had been forming a bullish triangle. Yesterday’s session sparked Dollar buying allowing the index to climb higher and break out of its recent pattern. When analyzing the different currencies, one can see that the index was influenced by major movement on the EUR. At the open of the European market the Euro dropped on speculation that the ECB, might have to continue with its rate cuts at its next meeting. Increasing volatility across the board didn’t have much of an impact on the other pairs, allowing them to continue to consolidate in recent range patterns.
On the commodity market, gold continued to grab investor’s attention. As explained on the weekly report, investors are now rushing back into this precious commodity on speculation that recent government plans could spark inflation. Crude Oil dropped by over 8% and is currently trading around previous support.
Looking forward, the U.S government is scheduled to release detailed information regarding the stimulus package later today. In addition, housing data is expected to show further declines. During the U.S session Fed Chairman Bernanke will address the market giving his report, including the FOMC meeting minutes.
USD Index
Market Pivot Points
Wednesday, February 18, 2009
Obama Signs the Bill, the U.S stock markets plunge
After a long weekend, the U.S stock markets experienced yet again selling pressure following Friday’s momentum. The major U.S indices dropped at the opening bell, gapping down to close the session in red. In one of their worst trading days, the S&P500 closed the session down by over 4.5%, while the NASDAQ plummeted by over 4%. Even though the major indices tried to gain back some of their intraday losses, the last half an hour of trading presented additional selling pressure, sending the indices to their lowest levels of the day.
Charm and charisma didn’t help the new president yesterday in his speech following the signing of the enormous stimulus package. Investors looked beyond the presidents words stating that the stimulus will put the economic on a “firmer foundation”, as economic headlines continued to show perishing companies. While the president has stated numerous times in the past that the stimulus plan will take time to leak through the economy, investors now seem to be turning their shoulder, looking for a better solution to put the economy back on the right path.
Economic data continued to paint a gloomy picture as the calendar showed that the Empire State Manufacturing Index plunged to a -34.70 figure. Even though the NAHB housing market index increased slightly more than expected, it wasn’t enough to hold the indices giving them support. Other economies economic data also continued to weigh on consumer sentiment as Australia’s Retail Sales dropped by 0.80% while their leading index showed a negative figure of -0.4%. The surprising figure came from England as their inflation rate came out higher than what analysts had expected.
Economic news continued to flood the markets following the U.S close, as the two giants Chrysler and General Motors, both released notes that they are in need for further funds. Chrysler approached the government for another $2 billion in loans, while General Motors said that it could need up to $30 billion from the Treasury Department. Both the companies stated that should they not receive the funds, Bankruptcy could cost taxpayers much more in the long run, due to the enormous job losses.
On the Forex market, the Dollar index raced forward breaking recent resistance. As shown on previous reports the Dollar index had been forming a bullish triangle. Yesterday’s session sparked Dollar buying allowing the index to climb higher and break out of its recent pattern. When analyzing the different currencies, one can see that the index was influenced by major movement on the EUR. At the open of the European market the Euro dropped on speculation that the ECB, might have to continue with its rate cuts at its next meeting. Increasing volatility across the board didn’t have much of an impact on the other pairs, allowing them to continue to consolidate in recent range patterns.
On the commodity market, gold continued to grab investor’s attention. As explained on the weekly report, investors are now rushing back into this precious commodity on speculation that recent government plans could spark inflation. Crude Oil dropped by over 8% and is currently trading around previous support.
Looking forward, the U.S government is scheduled to release detailed information regarding the stimulus package later today. In addition, housing data is expected to show further declines. During the U.S session Fed Chairman Bernanke will address the market giving his report, including the FOMC meeting minutes.
USD Index
Market Pivot Points
Last edited by a moderator: