Democrats 60 seats could prompt a dramatic sell-off on Wall Street
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Economy
A perfect storm could give Democrats magic 60 in Senate says cnn.
A perfect storm could give Democrats magic 60 in Senate says cnn.http://edition.cnn.com/2008/POLITICS/10/08/senate.election/index.html
But lot of investment professionals don’t necessarily want to give one party the keys to the entire city. That means there could be a huge sell off if Democrats win 60 seats or more.
With the election of 60 or more members, the winning party has the power of cloture. Under cloture, filibustering of bills brought to the Senate is not effective because the ruling party can limit the amount of time for debate. The net result is that the controlling party has the ability to pass bills faster and without consideration of bipartisan recommendations.
In recent elections, the stock market was not dramatically affected by Election Day events. The Dow closed up 101 points in 2004 to close at 10,137.05 on the day after the election. And in 2000, it edged down just 45 points, closing at 10,907.06 the day after the election amid the uncertain outcome of the Bush-Gore contest.
Post-Election Market Moves
1992 — Bill Clinton wins presidency: Dow closes at 3223.04 on Nov. 4, down 29.44 from Election Day.
1996 — Bill Clinton reelected: Dow closes at 6177.71 on Nov. 6, up 96.53 from Election Day.
2000 — Election results unclear: Dow closes at 10907.06 on Nov. 8, down 45.12 from Election Day.
2004 — George W. Bush reelected: Dow closes at 10137.05 on Nov. 3, up 101.32 from Election Day.
US Markets - Remembering October 2008
October was the worst month for the Standard & Poor’s index of 500 stocks in 21 years — since the 1987 stock market crash.
But the final week was the best week for the market in 34 years.
As befits such a wild month, it was the most volatile in the 80-year history of the S.& P. 500.
The huge gains of the final week were reminiscent of the sharp recoveries from bear market lows in 1974 and 1982. Both of those moves came while the economy was mired in recession, as it almost certainly is now.
If Monday’s stock market lows prove to be the low prices for this cycle, the bear market will have ended with the S.& P. 500 down 46 percent from the peak it reached in October 2007.
That would make the bear market almost, but not quite, as bad as the 1973-74 bear market, which ended with the index down 48 percent.
In the 2000-2 bear market, the fall was 49 percent.
The hectic market action in October spread across most of the globe. Remarkably, the American market was one of the calmer markets during the month. Several had more volatility and larger swings in prices.
Nor was the volatility limited to stock prices. Oil prices fell 33 percent during October, making this the worst month for that market since oil futures began trading in 1983. Oil is down to just under $68 a barrel, from a peak over $145 in July.
One volatility measure, shown in the accompanying charts, is the number of days in which an index closes up or down at least 4 percent.
In normal times, the market goes years without having even one such day. There were none, for instance, from 2003 through 2007. There were three such days throughout the 1950s and two in the 1960s.
In October, there were nine such days.
The accompanying chart shows the months, from 1928 through the present, when the S.& P. 500 had at least five days with 4 percent moves. Most of them were during the 1929 crash and the Great Depression.
Until now, September 1932 held the record for the most days with big moves, at eight.
Two days during October ended with the index leaping more than 9 percent, something that had happened only nine times in the previous 80 years.
For the week, the S.& P. 500 was up 10.5 percent, the best weekly gain since a 14.1 percent rise in the week that ended Oct. 11, 1974.
If the rebound this week indicated that the bear market of 2007-8 had ended, it lasted just over a year and hit bottom on Monday, at 848.92. It recovered to 968.75 by week’s end.
There were similar moves in most major indexes. The Dow Jones industrial average ended the week up 11.3 percent, at 9,325.01, and the Nasdaq composite climbed 10.9 percent, to 1,720.95.
For the month, the S.& P. 500 was still down 16.9 percent, the worst showing for the index since it fell 21.8 percent in October 1987. The Dow fell 14.1 percent, and the Nasdaq index lost 17.7 percent.
Both moves — weekly and monthly — affected every sector and nearly every stock. Only seven of the stocks in the S.& P. 100 fell this week, while just nine were up for the month.
Of the 30 stocks in the Dow industrials, only one fell this week. General Motors dropped 16 cents to $5.79 amid talks on a possible merger with Chrysler and additional government aid.
For the month, all 30 were down, with Alcoa turning in the worst performance with a decline of 49 percent. But in the final week, it rose 22 percent, ending at $11.50 after trading as low as $9 and as high as $22.35 during the month. It traded at more than $47 last year.
During the bear market, financial stocks led the way down. The S.& P. financial index fell 65 percent from the high it reached in early 2007 to the low close on Monday. By Friday, the index had recovered 17 percent.
But the final week was the best week for the market in 34 years.
As befits such a wild month, it was the most volatile in the 80-year history of the S.& P. 500.
The huge gains of the final week were reminiscent of the sharp recoveries from bear market lows in 1974 and 1982. Both of those moves came while the economy was mired in recession, as it almost certainly is now.
If Monday’s stock market lows prove to be the low prices for this cycle, the bear market will have ended with the S.& P. 500 down 46 percent from the peak it reached in October 2007.
That would make the bear market almost, but not quite, as bad as the 1973-74 bear market, which ended with the index down 48 percent.
In the 2000-2 bear market, the fall was 49 percent.
The hectic market action in October spread across most of the globe. Remarkably, the American market was one of the calmer markets during the month. Several had more volatility and larger swings in prices.
Nor was the volatility limited to stock prices. Oil prices fell 33 percent during October, making this the worst month for that market since oil futures began trading in 1983. Oil is down to just under $68 a barrel, from a peak over $145 in July.
One volatility measure, shown in the accompanying charts, is the number of days in which an index closes up or down at least 4 percent.
In normal times, the market goes years without having even one such day. There were none, for instance, from 2003 through 2007. There were three such days throughout the 1950s and two in the 1960s.
In October, there were nine such days.
The accompanying chart shows the months, from 1928 through the present, when the S.& P. 500 had at least five days with 4 percent moves. Most of them were during the 1929 crash and the Great Depression.
Until now, September 1932 held the record for the most days with big moves, at eight.
Two days during October ended with the index leaping more than 9 percent, something that had happened only nine times in the previous 80 years.
For the week, the S.& P. 500 was up 10.5 percent, the best weekly gain since a 14.1 percent rise in the week that ended Oct. 11, 1974.
If the rebound this week indicated that the bear market of 2007-8 had ended, it lasted just over a year and hit bottom on Monday, at 848.92. It recovered to 968.75 by week’s end.
There were similar moves in most major indexes. The Dow Jones industrial average ended the week up 11.3 percent, at 9,325.01, and the Nasdaq composite climbed 10.9 percent, to 1,720.95.
For the month, the S.& P. 500 was still down 16.9 percent, the worst showing for the index since it fell 21.8 percent in October 1987. The Dow fell 14.1 percent, and the Nasdaq index lost 17.7 percent.
Both moves — weekly and monthly — affected every sector and nearly every stock. Only seven of the stocks in the S.& P. 100 fell this week, while just nine were up for the month.
Of the 30 stocks in the Dow industrials, only one fell this week. General Motors dropped 16 cents to $5.79 amid talks on a possible merger with Chrysler and additional government aid.
For the month, all 30 were down, with Alcoa turning in the worst performance with a decline of 49 percent. But in the final week, it rose 22 percent, ending at $11.50 after trading as low as $9 and as high as $22.35 during the month. It traded at more than $47 last year.
During the bear market, financial stocks led the way down. The S.& P. financial index fell 65 percent from the high it reached in early 2007 to the low close on Monday. By Friday, the index had recovered 17 percent.
US Economic Report - October
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Economy
Huge Job Losses Foreseen.
In the week ahead, the main event on the economic calendar is the October U.S. employment report. That data, due Friday, is expected to show that U.S. nonfarm payrolls shed 200,000 jobs in October, according to a Reuters poll, while the unemployment rate is forecast to rise 6.3 percent.
Other key economic reports include the Institute for Supply Management (ISM) reports on manufacturing on Monday and non-manufacturing, or service-sector, activity on Wednesday.
Both are expected to produce readings showing that the economy contracted in October.
Credit Crisis Indicators are easing
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Economy
Lending rates continued to fall Friday, a sign that the government's numerous plans to ease the credit crisis are taking effect.
The overnight Libor rate fell for the fifth-straight day to 0.41% from 0.73% on Tuesday, according to the British Bankers' Association. It was overnight Libor's lowest level since the BBA began calculating the rate in 1997.
The 3-month Libor rate also dropped to 3.03% from 3.19% on Thursday.
Libor, the London Interbank Offered Rate, is a daily average of what 16 different banks charge other banks to lend money in the U.K.
Lending rates have been trending downward for the past several weeks. Just a month ago, 3-month Libor was over 4%, and the overnight rate was at an all-time high of 6.88%. Lower rates are a major boost for the strangled credit market, as more than $350 trillion in assets are tied to Libor.
"The credit crisis is tentatively solved - money is available to those who need it," said Pierre Ellis, senior economist at Decision Economics. "The next step is to get banks to trust each other, but that won't happen until we have a period of sustained stability."
The overnight Libor rate fell for the fifth-straight day to 0.41% from 0.73% on Tuesday, according to the British Bankers' Association. It was overnight Libor's lowest level since the BBA began calculating the rate in 1997.
The 3-month Libor rate also dropped to 3.03% from 3.19% on Thursday.
Libor, the London Interbank Offered Rate, is a daily average of what 16 different banks charge other banks to lend money in the U.K.
Lending rates have been trending downward for the past several weeks. Just a month ago, 3-month Libor was over 4%, and the overnight rate was at an all-time high of 6.88%. Lower rates are a major boost for the strangled credit market, as more than $350 trillion in assets are tied to Libor.
"The credit crisis is tentatively solved - money is available to those who need it," said Pierre Ellis, senior economist at Decision Economics. "The next step is to get banks to trust each other, but that won't happen until we have a period of sustained stability."
Emerging-Market Stocks Exit Bear Market With Three-Day Surge
Bloomberg says
Emerging-market stocks exited a bear market after MSCI Inc.'s index of developing nations surged more than 20 percent in three days following liquidity injections by the U.S. and International Monetary Fund.
The MSCI Emerging Markets Index of 25 nations jumped 9.2 percent to 558.02 at 10:07 a.m. in New York, bringing its advance since the Oct. 27 close to 23 percent. Russia's Micex Index increased the most, adding 17 percent.
Emerging-market stocks exited a bear market after MSCI Inc.'s index of developing nations surged more than 20 percent in three days following liquidity injections by the U.S. and International Monetary Fund.
The MSCI Emerging Markets Index of 25 nations jumped 9.2 percent to 558.02 at 10:07 a.m. in New York, bringing its advance since the Oct. 27 close to 23 percent. Russia's Micex Index increased the most, adding 17 percent.
US Q3 08 GDP Data
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Labels:
Economy
Economists expect the U.S. GDP figures to show a decline of 0.5 percent in the July-September quarter, according to the median of forecasts in a Reuters poll, and many see that as the start of a nine-month contraction, or possibly even longer.
The GDP data could also foreshadow a grim fourth quarter for the U.S. economy which began this month with a stock market crash, a credit freeze, and huge jobs cuts by U.S. companies.
The GDP data could also foreshadow a grim fourth quarter for the U.S. economy which began this month with a stock market crash, a credit freeze, and huge jobs cuts by U.S. companies.
Did we reach the bottom yet?
Is it time to buy stock? Ever since mid-September, we have read that the bottom is in because investors have "panicked" and "capitulated." But market history does not support this widespread view.
Here's part of Bob Prechter's explanation from his latest Elliott Wave Theorist:
"Ever since mid-September, we have read that the bottom is in because investors have 'panicked' and 'capitulated.' But market history does not support this widespread view. A perusal of volume data since January 2008 shows that, despite claims to the contrary, investors actually have not panicked. Here's why: In a market panic, the number of shares traded increases substantially on down days and bottom days. In October 1929 and in October 1987, for example, daily volume surged to between triple and quadruple the preceding summer’s average as prices plummeted. In contrast, volume recently has been quite steady, aside from two spikes."
Here's part of Bob Prechter's explanation from his latest Elliott Wave Theorist:
"Ever since mid-September, we have read that the bottom is in because investors have 'panicked' and 'capitulated.' But market history does not support this widespread view. A perusal of volume data since January 2008 shows that, despite claims to the contrary, investors actually have not panicked. Here's why: In a market panic, the number of shares traded increases substantially on down days and bottom days. In October 1929 and in October 1987, for example, daily volume surged to between triple and quadruple the preceding summer’s average as prices plummeted. In contrast, volume recently has been quite steady, aside from two spikes."
Nifty Futures Live Charts
The Nifty Future Buyer Vs Sellers Chart
When Sellers ( Red Line ) are Moreeee Nifty feel more pressure and chances is that it will go down.
When Buyers ( Blue Line ) are Moreeee chances of Nifty going UP is quite high.
Try this graph your self , Hope you will learn to make profit by following the buy sell trend.
Sell Nifty When huge sellers are there.
Buy Nifty When Huge Buyers are there.
http://www.niftylivecharts.com/nifty_future_live_chart.html
Financial Markets May be Shutdown
New York University Professor Nouriel Roubini said curbs placed on U.S. futures trading today shows his prediction that markets will be shut down amid panic selling is coming true.
``This morning, even before the markets in the U.S. opened, the S&P futures fell by more than their daily limit,'' resulting in curbs on futures trading, Roubini told a conference in Madrid today. ``What I said yesterday has already started.''
Roubini said yesterday that policy makers may need to shut down financial markets for a week or two as investors dump assets. Trading in futures on the Standard & Poor's 500 Index and the Dow Jones Industrial Average was limited today after declines of more than 6 percent. Trading of U.S. stocks would be suspended for an hour should the Dow Jones Industrial Average decline 1,100 points to 7,591.25.
``Things are getting worse, they are not getting better,'' Roubini said. There's an increased risk of a ``multi-year economic stagnation'' in the U.S. and ``we have a whole set of emerging market economies in trouble. Even a few of them going bust may cause systemic trouble.''
Russia's RTS exchange today stopped trading after stocks slumped more than 10 percent. Europe's Dow Jones Stoxx 600 Index slid 8.5 percent. The MSCI World index of global stocks has lost 45 percent this year as the fallout from the U.S. housing crisis toppled banks from Seattle to Paris.
Great Depression
Still, Roubini said he doesn't expect the economic consequences of the current crisis to be as severe as the Great Depression. ``During the Great Depression, output in the U.S. fell by more than 20 percent, I don't believe that's going to be the case,'' he said.
In July 2006, Roubini predicted the financial crisis. In February this year he forecast a ``catastrophic'' meltdown that central bankers would fail to prevent, leading to the bankruptcy of large banks exposed to mortgages and a ``sharp drop'' in equities.
Roubini said that the European Central Bank should provide ``much more monetary easing'' and governments around the world must put together a massive fiscal stimulus package after action so far failed to halt the stock-market rout. The U.S. bank bail- out plan will likely require between $600 billion and $700 billion, he said.
Roubini, a former senior adviser to the U.S. Treasury Department, said earlier this month that the world's biggest economy will suffer its worst recession in 40 years.
``This morning, even before the markets in the U.S. opened, the S&P futures fell by more than their daily limit,'' resulting in curbs on futures trading, Roubini told a conference in Madrid today. ``What I said yesterday has already started.''
Roubini said yesterday that policy makers may need to shut down financial markets for a week or two as investors dump assets. Trading in futures on the Standard & Poor's 500 Index and the Dow Jones Industrial Average was limited today after declines of more than 6 percent. Trading of U.S. stocks would be suspended for an hour should the Dow Jones Industrial Average decline 1,100 points to 7,591.25.
``Things are getting worse, they are not getting better,'' Roubini said. There's an increased risk of a ``multi-year economic stagnation'' in the U.S. and ``we have a whole set of emerging market economies in trouble. Even a few of them going bust may cause systemic trouble.''
Russia's RTS exchange today stopped trading after stocks slumped more than 10 percent. Europe's Dow Jones Stoxx 600 Index slid 8.5 percent. The MSCI World index of global stocks has lost 45 percent this year as the fallout from the U.S. housing crisis toppled banks from Seattle to Paris.
Great Depression
Still, Roubini said he doesn't expect the economic consequences of the current crisis to be as severe as the Great Depression. ``During the Great Depression, output in the U.S. fell by more than 20 percent, I don't believe that's going to be the case,'' he said.
In July 2006, Roubini predicted the financial crisis. In February this year he forecast a ``catastrophic'' meltdown that central bankers would fail to prevent, leading to the bankruptcy of large banks exposed to mortgages and a ``sharp drop'' in equities.
Roubini said that the European Central Bank should provide ``much more monetary easing'' and governments around the world must put together a massive fiscal stimulus package after action so far failed to halt the stock-market rout. The U.S. bank bail- out plan will likely require between $600 billion and $700 billion, he said.
Roubini, a former senior adviser to the U.S. Treasury Department, said earlier this month that the world's biggest economy will suffer its worst recession in 40 years.
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