21st Nov 2007

A late post today, as I was late for work. US markets have closed and it was definitely a whipsaw market! At 1030pm last night, US markets opened well with a high expectation from the fed meeting as well as strong earnings from HP. Here is the link for the whole article:

http://money.cnn.com/2007/11/20/news/economy/fed_outlook_analysis/index.htm?postversion=2007112016

When this news came out, down came the stocks as well. However, during the end of the day, it surged up again and you can see that it is in the positive range. Some key notes in the article are as follows:

But in a new economic outlook, the central bank also lowered its growth target for the economy in 2008, raising hopes that the Fed will cut rates again when it meets in December.

As I mentioned earlier, rate cuts will cut both ways for us, and here are some more information from the article:

Rate adjustments over the years:


Looking at the new fed outlook as well, they are anticipating a fall in GDP for next year and a rise in unemployment. As the normal relationship between unemployment and inflation is inverse, you can see that inflation is anticipated to drop to 1.8% in 2008 from 2.9% in 2007. This is their outlook for the next 2 years, and that is if everything is going what they anticipated.

Currently, YEN/USD is at 109.76-109.78 - 0.64, and USD is at its all time low against EURO while I heard the news over CNA on the bus, it seems that the dollar has started to decline yet again this week as compared to last week. Last week, I was mentioning that USD was strengthening slightly against most of the currencies and could poise a return but this week seems worst. Oil was traded at $98 per barrel, which took a +3.58% rise since last night!

Even though US is currently going into a holiday soon, Thursday being Thanksgiving and the Black friday, and if you are not sure what is the black friday, don't worry, it's not like the black monday where the markets crashed. It was called black friday due to accounting issues. As in the past, companies usually have losses declared from January to November, so in their accounts, they use the red pen to indicate this. The black friday which indicates that the buying season for the holidays will in turn generate profits for the companies and thus they will use the black pen to write their accounts.
Back to the holiday thing, I presumed that it should have low volume trading for the whole week, but it seems that the volume has been unexpectedly high for the past 2 days!

That's all for now, as I got to head back to work. :)