October 01, 2010

Market Wrap: for the week ending 1-Oct-2010

Noteworthy 
• Gold price at yet another record, reaching $1320 on Friday (Reuters)
• SEC/CFTC report says: Trading software sparked flash crash on May 6, 2010 (CNN Money)
• S&P 500 posted 8.8% gain in Sep-2010, best September performance since 1939 (FT)
• Euro area seasonally-adjusted unemployment rate was 10.1% in August 2010 (Eurostat)
• US real disposable personal income (DPI) increased 0.2% in August (ESA)
• US personal savings rate as a percentage of DPI was 5.8% in August (ESA)
• Euro area annual inflation is expected to be 1.8% in September 2010 (Eurostat)
• Cost of bailing out Irish banks could rise to as much as €50 billion (Economist)
• US GDP grew at an annual rate of 1.7% in the second quarter of 2010 (ESA)
• US House passes tariff bill to stop China's yuan imbalance with US (Washington Times)
• European Economic Sentiment Index rose again in September, to 103.2 from 102.3 in August (EC)
• US consumer confidence Index dropped to 48.5 (1985=100), down from 53.2 in August (AP)
• Eurozone banks (plus Sweden and Switzerland) have all but stopped selling gold (FT)

Weekly Market Barometers    
stock-2010-10-01   fx-2010-10-01

Curiosities
FINRA agrees to more disclosure on pay, rejects Madoff probe
Deflation is it, but some prices are sure to rise: FedEx to raise rates
"Great Recession" Pushes Gap Between Rich and Poor to Record Levels
Europe’s central banks halt gold sales
CFTC's and SEC's report on the causes of the "flash crash"

Chart Of The Week
US housing prices have been creeping up ever so slightly in the past 12 months.  Some regions and some specific cities however, have been hit  a lot harder than others and prices have seen some additional pressure on the down-side.  Worst hit, Las Vegas with a 57% price decline since the peak.  After all, the three most important factors for property prices are still location, location, location. 

CaseShillerCitiesJuly2010
source: www.calculatedriskblog.com

Recommended Video 
Please consider this excellent interview with John Lekas. As he remarks, the critical factor for the US economy going forward is employment. He considers the unemployment number U-6 which is at 16% as the “real” unemployment rate. The potential of 900,000 job losses in the municipal sector would equate to a decrease of about 1% in GDP.  The prospect of some States and Municipalities filing for bankruptcy smells a lot like more bailouts knocking on the doors of taxpayers...

Yfin

Highly Recommended Read
When some gurus speak, the markets listen. Bill Gross, Managing Director of PIMCO, is one such person.  Please consider his Investment Outlook October 2010.  Mr. Gross sums up his outlook as follows:

Investors will likely not know whether the mouse has grabbed for the cheese for several years forward. In the meantime, they are faced with 2.5% yielding bonds and stocks staring straight into new normal real growth rates of 2% or less. There is no 8% there for pension funds. There are no stocks for the long run at 12% returns. And the most likely consequence of stimulative government policies that strain to get us there will be a declining dollar and a lower standard of living.

Good luck and good investing!

Disclaimer
Neither the information nor any opinion contained in this communication constitutes a solicitation or offer by us to buy or to sell any securities, futures, options or other financial instruments or to provide any investment advice or service. Each decision by you to do any investment transactions and each decision whether a particular investment is appropriate or proper for you is an independent decision to be taken by you. In no event should the content of this communication be construed as an express or an implied promise, guarantee or implication by or from us that you will profit or that losses can or will be limited in any manner whatsoever. Past results are no indication of future performance. Please note that there is no requirement and no commitment to make any payments to FX Investment Strategies LLC in order to access our published information be it via email or via website publication. All information is publicly available without any required monetary consideration.  Any payments or donations made by you are deemed to be voluntary and cannot be considered as payments for investment advice given to you.

No comments: