US Markets Update and OutlookAuto bailout likely to steal limelight from Fed
Fed seen cutting rates; OPEC to cut production; Goldman, Morgan report
MarketWatch: Efforts to prop up the ailing U.S. auto industry, along with economic data that may provide fresh clues about the depth and duration of the recession, could outweigh investor interest next week in the Federal Reserve's interest-rate decision.
The possibility that a collapse of the Big Three automakers, General Motors Corp., Ford Motor Co. and Chrysler could plunge the economy deeper into recession rattled markets last week. "We're probably going to limp through next week as Washington tries to solve the auto bailout question," said Hugh Johnson, Chairman of Johnson Illington Advisors. "There will be a lot of attention on what the Fed does and what it says, but it won't be as important as what happens with the bailout." Senate talks on the package collapsed late Thursday, paralyzing a $14 billion federal loan package for the Big Three, which had been approved by the House of Representatives. Yet by Friday, the Treasury said it stood ready to provide funds for automakers until lawmakers consider a longer-term package next year.
Separately, Canada said it will provide CA$3.5 billion, according to reports. The assurance by the White House helped the market recover on Friday, with the Dow Jones Industrial Average finishing 64 points higher at 8,629, even as it lost 0.1% for the week.
The picture was brighter for the rest of the market. The S&P 500 climbed 6 points to end at 879 on Friday, giving it a 0.4% rise on the week. The Nasdaq Composite rose 32 points to 1,540, up 2.1% from a week ago.
Besides the auto bailout, investors have been hopeful that big infrastructure spending by the incoming administration of President-elect Barack Obama and by other governments around the world will help shore up economies and markets. "With fiscal stimulus all the rage around the world, it's no surprise that equity investors have bid up related industries," said Robert Kavcic, an analyst at BMO Capital Markets, in a note. "Among the top performers in the S&P 500 over the past month have been engineering, building products and construction materials, all up more than 20%."
Fed and OPEC cuts
The Federal Reserve is again widely expected to cut interest rates by another 50 basis points on Tuesday, bringing its key Fed funds rate down to 0.5%. The Organization of Petroleum Exporting Countries will also meet in Algeria on Wednesday, and is expected to deliver a big cut in production. Such expectations helped crude oil prices surge over the past week, providing support for the broad market as it lifted the shares of oil producers such as Exxon Mobil Corp and Chevron Corp. Crude-oil futures finished the week at $46.28 a barrel, posting a weekly gain of $5.47, or 13.4%, from last Friday's close of $40.81 barrel.
Economic data, earnings
Data on manufacturing in the New York region will be released on Monday, and for the Philadelphia region on Thursday. Monday will also bring the December housing market index from the National Association of Home Builders. Late Friday, Fitch Ratings downgraded the credit ratings of a number of homebuilders, citing the difficult housing environment and expectations that housing activity will be even more challenging than previously anticipated in 2009. Among those affected by the downgrades were KB Home. Besides the Fed decision, Tuesday will bring housing starts data for November. Wednesday will bring industrial production figures and the consumer price index for November. Weekly jobless claims data on Thursday will also be closely monitored. Last week, the labor market weakened further, with the number of first-time filings for state unemployment benefits jumping by 58,000 to a 26-year high of 573,000. The data showed that businesses are laying off workers at a rapid pace, and that finding employment is ever harder for those who've lost their jobs. also announced big job cuts on Thursday and the stock ended higher Friday, even as it fell for the week.
Next week, the two remaining U.S. investment firms Goldman Sachs and Morgan Stanley are expected to post big writedowns -- Goldman on Tuesday and Morgan Stanley on Thursday.
KLSE CI Technical Update and Outlook
ICapital on daily KLSE CI. It was moving in tandem with the other major indices admidst the disapointing outlook of the global economy. However, this past week, the KLSE CI has started to consolidate while consistently trending below the 30- and 50-day moving averages. Although the longer term indicators are still showing a grim picture, the daily indicators have somehow shown little improvement. Meanwhile, sentiment is now at a crucial stage as the series of measures launched by the US government to soften the credit squeeze is being watched for its ability to restore the normal functioning of the US economy.
The possibility that a collapse of the Big Three automakers, General Motors Corp., Ford Motor Co. and Chrysler could plunge the economy deeper into recession rattled markets last week. "We're probably going to limp through next week as Washington tries to solve the auto bailout question," said Hugh Johnson, Chairman of Johnson Illington Advisors. "There will be a lot of attention on what the Fed does and what it says, but it won't be as important as what happens with the bailout." Senate talks on the package collapsed late Thursday, paralyzing a $14 billion federal loan package for the Big Three, which had been approved by the House of Representatives. Yet by Friday, the Treasury said it stood ready to provide funds for automakers until lawmakers consider a longer-term package next year.
Separately, Canada said it will provide CA$3.5 billion, according to reports. The assurance by the White House helped the market recover on Friday, with the Dow Jones Industrial Average finishing 64 points higher at 8,629, even as it lost 0.1% for the week.
The picture was brighter for the rest of the market. The S&P 500 climbed 6 points to end at 879 on Friday, giving it a 0.4% rise on the week. The Nasdaq Composite rose 32 points to 1,540, up 2.1% from a week ago.
Besides the auto bailout, investors have been hopeful that big infrastructure spending by the incoming administration of President-elect Barack Obama and by other governments around the world will help shore up economies and markets. "With fiscal stimulus all the rage around the world, it's no surprise that equity investors have bid up related industries," said Robert Kavcic, an analyst at BMO Capital Markets, in a note. "Among the top performers in the S&P 500 over the past month have been engineering, building products and construction materials, all up more than 20%."
Fed and OPEC cuts
The Federal Reserve is again widely expected to cut interest rates by another 50 basis points on Tuesday, bringing its key Fed funds rate down to 0.5%. The Organization of Petroleum Exporting Countries will also meet in Algeria on Wednesday, and is expected to deliver a big cut in production. Such expectations helped crude oil prices surge over the past week, providing support for the broad market as it lifted the shares of oil producers such as Exxon Mobil Corp and Chevron Corp. Crude-oil futures finished the week at $46.28 a barrel, posting a weekly gain of $5.47, or 13.4%, from last Friday's close of $40.81 barrel.
Economic data, earnings
Data on manufacturing in the New York region will be released on Monday, and for the Philadelphia region on Thursday. Monday will also bring the December housing market index from the National Association of Home Builders. Late Friday, Fitch Ratings downgraded the credit ratings of a number of homebuilders, citing the difficult housing environment and expectations that housing activity will be even more challenging than previously anticipated in 2009. Among those affected by the downgrades were KB Home. Besides the Fed decision, Tuesday will bring housing starts data for November. Wednesday will bring industrial production figures and the consumer price index for November. Weekly jobless claims data on Thursday will also be closely monitored. Last week, the labor market weakened further, with the number of first-time filings for state unemployment benefits jumping by 58,000 to a 26-year high of 573,000. The data showed that businesses are laying off workers at a rapid pace, and that finding employment is ever harder for those who've lost their jobs. also announced big job cuts on Thursday and the stock ended higher Friday, even as it fell for the week.
Next week, the two remaining U.S. investment firms Goldman Sachs and Morgan Stanley are expected to post big writedowns -- Goldman on Tuesday and Morgan Stanley on Thursday.
KLSE CI Technical Update and Outlook
ICapital on daily KLSE CI. It was moving in tandem with the other major indices admidst the disapointing outlook of the global economy. However, this past week, the KLSE CI has started to consolidate while consistently trending below the 30- and 50-day moving averages. Although the longer term indicators are still showing a grim picture, the daily indicators have somehow shown little improvement. Meanwhile, sentiment is now at a crucial stage as the series of measures launched by the US government to soften the credit squeeze is being watched for its ability to restore the normal functioning of the US economy.
* A beautiful view of Colmar Tropicale Hotel, Bukit Tinggi, Pahang amongst the hills. Politicians are jumping into the ban "hillside development" wagon! No more hillside projects here and there. Yeah....we will see.....
* Economic Intelligence Unit: Malaysia politically unstable, 2009 growth at 1.5%.
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