Week Three

On the Week three session we spoke about what mainly happened in the week of Monday the 12th of October to Friday the 16th as many multinationals posted their quarter results which affected the way the financial markets performed that week. We also discussed how the US government debt was affecting commodity prices and the dollar itself. We also discussed about our virtual portfolios on the “KaChing” application on Facebook.

Here is the power point presentation

The text report:

Last week, the indices continued their upward trend in the pace of many publications of U.S. firms that have helped reinvigorate the stock market to record annual speed. The Dow Jones won 2% to 10,040 points and finding the psychological barrier of 10 000 points and the Nikkei 2.4% to 10,257 points. Are we seeing a pure speculative move in the markets or an economic recovery ?

On Monday, investors have confirmed their confidence in the markets started last week and were reassured by the first digit of business results in the image of Philips. The Dutch group has posted a net profit of 176 million euros. Dow increased by +0.80% on monday.

Tuesday was a disappointing session due to the results of Johnson & Johnson that came up at -2.13%. The German center for eu economic research index has been published to 56.0 while analysts had forecast on a forecast to 58.6. This indicates that activity in the banking sector in Germany is always under pressure and the economic recovery will be slow.

Wednesday was the day to remember this week with the release of very good results from Intel and JP Morgan. Intel has offered a very positive signal to the market by revealing the results to 1.66%. In the afternoon, JP Morgan has pleasantly surprised the markets by posting + 3.3% for a net profit of 3.588 billion dollars in the third quarter, seven times the prediction of 527 million.

The British economy destroyed fewer jobs in September compared to forecasts, 20 800 against 25 100 scheduled but the unemployment rate in the country was maintained at 7.9%. Finally, retail sales in the United States have also showed somewhat positive results at -1.5% against a consensus of -2.0%.

Due to the positive news, the major indexes broke annual records. The CAC 40 has reached 3880 points and the Dow Jones was treated for cables of 10 000 points to 9995.

Thursday was the turn of Goldman Sachs and Citigroup to release their quarterly results. Goldman Sachs announced earnings multiplied by four and Citigroup posted a profit of $ 101 million for the third quarter. Among other values, Google and IBM grew their earnings, but Nokia has been the great disappointment by posting a loss of 15 cents per share.

On Friday indices where on the negative due to the negative results from General Electric, which fell from 16,79 to 16.07 dollars.

This amount of quarterly results helped to give new direction to markets, and at the same time, to clarify a little more out of the crisis in the global economy. We know we’re in a slow recovery of world economic activity, slowed by a high unemployment rate, passing first by the return of corporate profits.

On the commodity market, the week was particularly rough for the gold that went to record after record. Opening Monday at $ 1048, gold went to touch the $ 1070 mark Wednesday before returning to its level at the beginning of the week. However, this increase is mainly due to the slide of the greenback has lost 1.15% this week.

The barrel of oil was awarded for its more than 7% for the week ending the week at over 77 dollars.

Finally, gold and oil markets remained under pressure this week following concerns about the dollar fell to the lowest in 14 months against the euro, which pushes investors to adopt a strategy to protect against fluctuations currencies by placing their assets in commodities.

The dollar also got hit due to rumors about OPEC moving away from to dollar to a basket of currencies.

Sources: Saxo Banque , Reuters, Bloomberg, Yahoo Finance, ZEW indicator.

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