In anticipation of the launch of corporate reporting U.S. indexes continued to rise
Oct 7th, 2009 | By admin | Category: News International MarketsUpsurge of optimism on trading floors contributed to explosive growth of the world's leading stock indexes. The reason for the purchases are optimistic expectations for the upcoming season of corporate reporting in the U.S., as well as rising prices for raw materials.
In anticipation of the launch of corporate reporting U.S. indexes continued to rise. The optimism of investors based on expectations that corporate records should confirm the U.S. authorities announced the beginning of the restoration of business and economics. However, despite the positive dynamics of the market keeps the tension: if the corporate records show that the improvement of financial and economic indicators of business due to a reduction of costs and inventory, not sales growth, optimistic investors may collapse. As a result of trading, the Dow rose 1.37% to 9,731.25 p., index SP - also at 1.37% to 1,054.72 p. Today is traditionally the first results of its operations in the third quarter will present aluminum giant Alcoa.
today's trading in Asia also are on the rise. As leaders in the growth of mining companies and banks, through which the regional benchmark MSCI Asia Pacific is growing at 1,1%, and in general for two days, the index adds 2.8%. Australians seem to have forgotten about the rate increase and joined the general rally - code SP /ASX growing at 1,7%.
In general, the recent movement in the stock markets may be associated with capital inflows, which began running away from defensive assets, including treasuries, that may be. due to an increase in inflationary expectations in the world and signals the authorities of the departure of the monetary authorities of the ultra soft monetary policy. The first sign was the decision of yesterday's Bank of Australia to increase interest rates. While such decisions are not expected from the Fed and the ECB, but it is clear that the start of a reversal process is given. Currently, the yield of benchmark ten-year treasuries are close to the annual minimum, which correlates with little prospects of reducing the liquidity of the market in the decline in support for financial markets, U.S. monetary authorities and especially with the prospect of rising interest rates. Thus, the probability is high that the sauce of corporate reporting, which overlooks the time of the treasuries capital will give the acceleration of the rally in equity markets. At the same time, exit returns treasuries at levels consistent with market expectations of rates (25-45 bp to the current 3.25% per annum), the demand for risky assets may significantly fall, which threatens to stock and commodity markets, a major correction .
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