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20/11/08
| FTSE 100 |
4005.68, -202.87 |
Dow |
7997.28, -427.47 |
| FTSE 250 |
5706.58, -219.40 |
Nasdaq |
1386.42, -96.85 |
| FTSE All Share |
1998.02, -97.21 |
S&P 500 |
806.58, -52.54 |
| Nikkei |
7703.04, -570.18 |
Hang Seng |
12298.56, -517.24 |
| Oil (Crude) |
$53.62 |
Gold |
$736 |
| Base Rate |
3% |
10 Yr Gilt |
3.989% |
| £/$ |
1.485 |
Euro/Gbp |
0.842 |
Markets
US stocks sank on Wednesday, leaving the Dow below 8,000 for the first time since March 2003. Continued anxiety about the state of the economy and uncertainty about a government lifeline were the catalysts yesterday. Losses were broad, with the banking sector hit particularly hard.
The Dow Jones tumbled 427.47 points to close at 7,997.28, the S&P 500 dropped 52.54 points to end at 806.58. The Nasdaq slumped 96.85 points to finish at 1,386.42.
Car manufacturers plummeted as investors worried that there will be no quick rescue package from Congress. Instead, the possibility of bankruptcy in the sector has been talked about, with analysts concluding that this could have a dire effect on the broader economy. General Motors sank 9.7% having been more than 18% lower earlier in the session, while Ford Motor Co shed 25%.
Financials really suffered, troubled by further weak economic data that continues to highlight the worsening economy. The Labor Department's Consumer Price Index fell 1% in October, compared to forecasts of 0.8%, while another report showed record declines in both housing starts and building permits. Banking giants fell to multi-year lows including Citigroup, down 23%, Bank of America, off 14% and JPMorgan losing 12%.
Elsewhere, Yahoo Inc plunged 20.9% after comments from Microsoft's Chief Executive. He ruled out an acquisition of the internet media company, saying they were still interested in restarting talks on a Web search partnership. Microsoft dropped 6.8%.
US light crude oil for December delivery slid $0.77 to settle at $53.62 a barrel. COMEX gold for December delivery gained $3.30 to close at $736 an ounce. Treasury prices rose, lowering the yield on the 10 year note to 3.44% from 3.52%.
The Nikkei fell 570.18 points to close at 7,703.04 this morning. The deepening global recession eroded earnings at insurers and prompted the fastest drop in exports in seven years. Tokio Marine Holdings Inc, Japan's largest casualty insurer, plunged 15% after it and six listed peers cut profit forecasts as shareholdings plunged.
The Hang Seng ended 517.24 points lower this morning at 12,298.56, following the US after consumer prices dropped. Yue Yuen Industrial (Holdings) Ltd, the world's largest maker of sports shoes, sank 9.8% on speculation demand for its products will decline.
The FTSE 100 is 81.61 points lower at 3,924.07 this morning, following world markets. Aviva tops the fallers board, down 10.8%, with Schroder filling the second spot, down 8.9%. Just eight stocks manage gains, including Royal Bank of Scotland, up 2.8% and National Grid, 0.6% higher. Economics
UK Retail sales (Oct) 09.30 gmt
The ONS data on retail spending has been considerably more upbeat than either the surveys of the retail sector, or the health of the retail sector implied by the number of profit warnings that the retailers have issued. Overall a further decline this month is expected for this month.
UK Public finances (Oct) 09.30 gmt
With the Pre-Budget Report just around the corner, the state of the public finances will fall under scrutiny. October is usually a tax take month but narrowing is expected to continue to exceed the Chancellors expectations.
US Initial jobless claims (week 15 Nov) 13.30 gmt
Last weeks initial claims rose to a seven year high 516,000, while the 4 weeks average climbed to 490,000. 490,000 is expected for this week, pointing to significant further job losses in the first two weeks of November, Continuing claims for the previous week are likely to increase again from 3.9m to 3.97m.
US Philadelphia Fed (Nov) 15.00 gmt
The Philadelphia Fed dropped 41 points in October from 3.8 to -37.5, dwarfing the previous record decline, in January 2001, when the index fell from -7.8 to -37.2. The decline in 2001 was followed by an 8 points recovery in February 2001. A similar rebound this month would put the index at around -30. This could also bring the headline index closer in line with its components, given last months reading of -30.5 for new orders and 18.8 for shipments. These results would suggest around 41 to 43 for ISM manufacturing, well below breakeven.
US Leading indicators (Oct) 15.00 gmt
October leading indicators are expected to fall 0.6 percent. The biggest factors were sharply lower stock prices and consumer expectations, contributing -0.9 ppt and -0.3ppt respectively. A decline of 750,000 is expected, which would contribute a -0.2ppt to LEI. Positive offsets should come from real money supply growth (+0.8ppt) and the positively sloped yield curve.
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