End of the First Quarter, 2008! U.S. textbook case of a defensive market!
Stocks
U.S. Stocks Are Doing Better Than Most
The Dow Jones Industrial Average has fallen 7.9% this year, while the benchmark indexes in Germany, France and Japan have dropped at least double that amount. India is down almost 20%, and China has tumbled 32%.
The performance of global markets so far this year is "a textbook case of the U.S. being the relatively defensive market," says Kevin Gardiner, head of global equity strategy at HSBC in London. Although the U.S. economy appears on the brink of recession, he says, its stock market has incurred fewer losses than markets in countries where economies are in far better shape.
The All Ordinaries Index declined 16 percent in the first
three months of the year, the most since the end of 1987,
following the October crash. (Bloomberg.com article.)
From the Wall Street Journal, some "money" quotes (subscription req'd):
Aside, for Chinese students - a "money" quote just means the important point, in my humble opinion. Finally:"It's really going to take a signal from the Federal Reserve that they're back in inflation-fighting mode to get these [commodity] markets to pull back," said Mr. Vergleger. At the moment, the central bank has instead placed a higher priority on spurring growth in the U.S. economy, which many analysts believe has tipped into recession.
On Monday, Mr. Paulson outlined an ambitious plan to overhaul the federal regulatory structure, acknowledging that it will take years to implement and extend beyond the current period of turmoil in the credit markets.
Although the plan raised hackles in some corners of Wall Street, some market participants were comforted by Mr. Paulson's gradual approach and the increased role his plan outlines for the Fed, which would be given increased responsibility for the financial-services industry, including investment banks.
....
CME Group, which operates the Chicago Mercantile Exchange and the Chicago Board of Trade, slid 2.1%. Nymex Holdings, which lists the benchmark U.S. crude-oil contract and is due to merge with CME pending regulatory approval, was down 2.2%.
CME issued a statement expressing concerns about the plan. Referring to the current differences between CFTC regulation versus SEC regulation under the current setup, CME said: "An effort to homogenize the two regulatory regimes is certain to cause more harm than good."
Dollar - Arab Economies remain faithful to the U.S. (so far) they are pegged to $ - Bloomberg.com exclusive:
"The Gulf states may be decoupled from the U.S. economy, but they are still shackled to the dollar,'' Williams said. "While they recognize the shortcomings of the status quo, policy makers seem minded to maintain it, at least for now.''
The survival of the pegs shows how hard it is for major
economies to break from the dollar, regardless of its 13.4
percent decline on a trade-weighted basis in the past 12 months.
Saudi Arabia keeps the riyal fixed at 3.75 to the dollar by
purchasing or selling the greenback with the local currency.
The dollar posted its biggest quarterly loss against the euro in almost four years as the Federal Reserve cut its target lending rate by the most since 1984 to revive the economy while the European Central Bank held borrowing costs at a six-year high to contain inflation.
The U.S. currency lost 8.2 percent against the euro this quarter, the most since December 2004. Today it touched $1.5896, short of the all-time low of $1.5903 reached March 17.
The pound reached an all-time low of 79.73 pence against the euro today after research company Hometrack Ltd. said the average price of a home in England and Wales declined 0.2 percent this month. Sterling is down 8.2 percent against the euro this quarter, the biggest drop ever.
"Until the ECB starts changing its hawkish tone, you are going to see relentless sellers of dollars and buyers of the euro anywhere between here and $1.55,'' said :S:d1" onmouseover="return escape( popwSearchNews( this ))">Firas Askari, head of foreign-exchange trading at BMO Capital Markets in Toronto.
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