Talk About a Sea of Red

Americans taking the day off will be welcomed with a sea of red across all the major stock markets of the world... Practically everything is red. Check it out (source is Wall Street Journal Markets Data Center--a very good overview of all things financial):

(note that some of the markets were closed so some numbers are from Friday; coincidentally, my former home country, Sri Lanka is the only one green in the pics below ;) Trust me, nothing good is happening in that country :( ).

Major World Markets


Selling Started Off in Asia...


Infected Europe...


And Clobbered the Americas...



Commodities were also down but the US markets were closed so US commodity prices aren't available. One of my calls was for the Japanese Yen to strengthen and it looks like it is happening. There is also a possibility of US$ strengthening if the sell off continues.

The performance of US markets tomorrow will set the mood for all the other markets. One of the big events tomorrow is the Bank of America conference call. Any bad news from them and watch out. As for me, the Ambac conference is what I'll be watching.

Comments

  1. tt247January 21, 2008 at 5:09 PM

    The BoA call tomorrow is huge, whats worse is that because of Martin Luther King day today hardly any 4q preview notes were released by the analysts!

    ReplyDelete
  2. cakJanuary 21, 2008 at 7:24 PM

    Early indications put the Dow down 500 points+ on the open, the S+P down 4 -4 1/2%. The Fed will really be in the cross hairs now. I'm not saying they are the cure but, unfortunately, they've become part of the problem. Indecisive, lack of focus, bumbling PR, too many voices in the wilderness or as Paul Volcker stated "too democratic".

    Now facing another potential massive credit squeeze they have no choice. They have to cut, and soon. Ironically, rates may have to fall to the same level that Greenspan dropped them to 4,5 years ago which, according to some, precipitated the housing bubble.

    Personally, I'm thinking they may cut tomorrow. We'll see.

    ReplyDelete
  3. Sivaram VJanuary 21, 2008 at 7:42 PM

    I don`t think the rate cuts are going to save anyone. If the economy is actually facing problems, stock market will likely decline more. Staying cautious or on the sidelines is probably the best thing now (or look for a beaten down stock--but don`t end up with my Ambac situation ;) )...

    Having said that, rate cuts will help the homeowners. A lot of ARM mortgages reset this year and some bears were predicting huge defaults. But if rates reset to similar or even slightly lower rates, home default rates won`t be so bad...

    ReplyDelete

Post a Comment

Popular Posts

Thoughts on the stock market - March 2020

Image
Right now, DJIA has a P/E of 16.8 and forwand P/E of 15.1, whereas S&P 500 is at 20.1 with forward P/E of 15.8. Source: WSJ market Data If you ignore interest rates and inflation expectations--both of these influence valuations but depends on your macro call-- the market is not cheap. Long-term P/E is around 15. Trailing P/E is around 20% (Dow) to 40% (S&P500) higher than average. Forward P/E is in line with long term average but that assumes a strong V recovery. Consensus forecast is for profits to drop 1.2% in 2020. In 2008, it dropped 25.4% so current forecast is a very mild recession. Covid-19 coronavirus is not going to last more than a few months but these forecasts are still too rosy in my opinion. So I wouldn't rely on forward P/E. The richly valued (mostly tech or high quality) have not fallen much but the distressed ones have. So if you want to outperform in the long run, I think one’s choice right now is to: • Wait for market to fall another, say
✖ READ MORE >>>

Warren Buffett's Evolution and his Three Investment Styles

Image
A Young Warren Buffett In a comment to one of my posts , Mark Carter, who incidentally appears to have a  good blog worth checking out , asked: "Buffett Prime is 1970's to early 1990's" Could you elaborate? I have vaguely indicated how I view Warren Buffett in the past, but I thought I would detail my view of his investing behaviour. This is more of an opinion piece and many others would disagree with me (if you do, I'm curious to hear your thoughts). I don't follow Warren Buffett as closely as many value investors so I may get some facts wrong. My view is that Warren Buffett went through three different phases, with each consisting of different investment techniques. The overall investment theory remained the same—what people call value investing—but his execution, tactics, and strategy differs across the three phases. Some people may break up his career into additional periods but my feeling is that the three I will describe essentially capt
✖ READ MORE >>>

Hugh Hendry discussion at the Alternative Investment Conference

Thanks to Value Investing World for bringing this Hugh Hendry interview to my attention. I may not agree with all the things—short-term orientation of hedge funds is actually worse IMO; the sharp pencil effect doesn't always work—but Hendry is a true contrarian and worth listening. Like Marc Faber or Jim Rogers, you also can't take everything Hugh Hendry says seriously. I had always felt Hugh Hendry was firmly in the deflation camp but I get the feeling that he is now opening up to high-inflation possibilities. Otherwise, his stance appears to be similar to past opinions.
✖ READ MORE >>>