Other Markets

Buffet is optimistic that the markets will not crash in the near future & sells financial instrument like insurance: Put options

The International Monetary Fund (IMF) has released a global financial stability report stating critical threats and risks that global world markets are exposed to now and the future. Major causes for concern and the major threats to the global financial markets are higher interest rates and other global "imbalances". Some threats to be aware of are the cyclical risks stemming from tighter credit and higher inflation, bad credit - and the quality of credit provided as well as imbalances that have caused the US current account deficit (cAD) to unprecedented levels.

Macquarie has forecasted Japan to be the fastest growing G7 nation over the next two years. Macquarie has lifted its forecast for Japanese GDP growth from 3 per cent to 3.6 per cent financial year. This stronger grow is a "reflation" of domestic demand which accounts for structural growth that is largely independent of the state of the global economy.

In a recent SMH Article which is syndicated from the NYTimes, it notes how Amazon isn't revealing much by way of its success or failure in the recent Amazon Prime promotions, sales figures and growth or even costs. And to show the investors' disappointment: the stock has fallen 22 per cent from its recent highs. Seems like this once jewel of the internet is fast becoming a white elephant.

The Bank of England has held their interest rates steady at 4.5 per cent for the sixth month in a row, a decision widely expected by financial markets. There was no change and no surprise to the markets given there was evidence of modestly stronger economic activity and a more robust housing market in England as of late. The British Pound steadied following the release of the rate decision details after the Pound had dipped earlier in the trading session on disappointing British trade data.

With the fall in Oil and Gold recently some traders have probably undertaken some profit taking strategies. There is still Hope for the Resources sector - the fall was governed by no more than "Fear" and "Greed". There may be more volatility in the forthcoming market sessions with fingers pointing to an amount of speculative money that was driving up oil, gold and base metals prices in the beginning of 2006. GSJB Were reckons not to lose hope on the resources sector.

Yes! Book your Road Trips Now. Oil prices have fallen sharply overnight as market traders' concerns eased over the stalemate over Iran's nuclear energy program and the market is awaiting US supply data. New York light sweet crude (delivery March '06) fell $US2.02 to close at $US63.00 per barrel. In London, the price of Brent North Sea crude for March delivery dropped $US1.77 to $US61.56 per barrel in closing trade. Worries of supply disruption have eased but still not dismissed - if ever the situation escalates quickly, expect the oil prices to jump.

The US Fed Reserve has raised interest rates for the 14th time by 25 points to 4.5 per cent. The Fed has also signaled that there is a prospect for further rate hikes to come. It was the final meeting with Greenspan who is 79 and retiring as chairman after 18 years. The new chairman is the US Senate voted White House economic advisor Ben Bernanke.

"Although recent economic data have been uneven, the expansion in economic activity appears solid," the FOMC said in a statement.

Oil Prices rose to a 3 month highs in London and New York each market quoting a price over $US 64 and $US 65 respectively because of rising geopolitical tensions in Iran and Nigeria.

New York's main contract, light sweet crude for delivery in February, jumped $US1.46 to $US65.38 per barrel in electronic dealing. It had earlier climbed to $US65.53 - the highest since October 3, 2005.

In London, the price of Brent North Sea crude for March delivery rose US95¢ to $US64.13 per barrel. The February contract had expired on Monday at $US62.93 per barrel.

US stocks bounced back from early losses and ended nearly flat overnight, with the Dow Jones Industrial Average holding above 11,000 as upbeat news from Apple Computer offset weak earnings from Alcoa.

The Dow blue-chip index, which fell more than 50 points in early trade, was off a fractional 0.88 point at 11,011.02 at the closing bell.

On Monday, the benchmark index closed above 11,000 for the first time since June 2001.