| Weekly Market Overview | ||
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Week ending 21st December 2007 This is a very brief “week ending” written on the 21st December ie before the trading week ends. We close shop today for the Xmas break, not returning until the week ending 4th January 2008. |
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 Indices - Year to Date (14th December 2007) |
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| Stocks continued to
sell ff during the first couple of days of this week before gaining some
traction from mid-week and judging by today’s activity have a sporting
chance of an up week. There have been further bank write-offs, this week
in the form of Morgan Stanley’s $9.4BN, followed by a “forced” cash
injection of $5BN from the Chinese Government to prop up the bank’s
capital base. For $5BN the Chinese Investment Corporation gets a 9.9%
stake in MS. Meanwhile the ECB played Santa Claus as it “offered” a
whacking $500BN of liquidity to the banking sector (at market interest
rates, for very short term and collateralised by only the best assets of
course) in an increased effort to kick start the commercial paper market
into life. No panic here then? On the currency front the $US is recouping some of its dismal losses, mainly at the cost of the £Sterling, particularly as the UK’s Government finances and current account appear to be spiralling out of control. Sovereign debt yields are falling again this week, either reassured that the World’s Central Banks know what they are up to in respect of lowering interest rates whilst endeavouring to inflate their way out of a credit crunch OR the bond markets are sniffing major economic problems around the corner. Commodities have been moving sideways this week to date, whereas one would be expecting the precious metal prices to be soaring on the back of all of this “liquidity” being offered. Know doubt that we will all find out as 2008 unfolds so until that arrives, may we take this opportunity to wish all of our readers festive greetings and a happy, healthy and hopefully a prosperous 2008.
“Sooner or later everyone sits down to a banquet of consequences”
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