Fellow Bursarians,
We can no longer trust Dow Jones to give us market leadership from now on.
It is too emotional and goes cuckoo every time rating agencies downgrade sub-prime institutions. They are also averse to Fed pronouncements, always giving the worse scenario and dramatising woes that bring down the Dow.
Case in point:
Today's early trade on Wall Street:The roller-coaster Dow is on a gaining track, erasing early losses, as strength in technology shares trumped weakness in blue chips. However, gains
were limited by ongoing worries about the credit market.The market is awaiting Friday's key speech from Federal Reserve chairman Ben Bernanke.
The Dow Jones industrial up 3.74, almost two hours into the session, erasing early losses, while the broader S&P 500 up 2.10 index gained 0.2 percent.
The advance lost steam Thursday morning, amid a new wave of problems for the financial sector and jitters about Bernanke's speech Friday. However, by the late morning, the positive tone returned.
The Fed chairman is due to speak Friday at an economic symposium in Jackson Hole, Wyoming.
The Fed has been injecting billions into the banking system over the last few weeks, and has cut the discount rate - which affects bank loans. Now investors are looking for signs that the bank will also cut the fed funds rate, which affects consumer loans.
On Thursday, the Fed
added another $5 billion of temporary reserves to the banking system.Investors on Thursday also took in the revision of second-quarter gross domestic product growth (GDP). GDP grew at a
4.0 percent annual rate, revised up from an initial reading of 3.4 percent. Economists surveyed thought it would rise to a 4.1 percent annual rate.
However a separate report showed a
surprise rise in weekly jobless claims, the government said.
Treasury prices rose, lowering the yield on the 10-year note to 4.53 percent from 4.56 percent late Wednesday.
In curerncy trading, the
dollar fell versus the yen after posting its biggest one-day percentage gain against the Japanese currency on Wednesday. However, with bets that risk has returned to the market, the greenback slipped again. The dollar rose versus the euro.
As we near the 2008 Budget to be released on September 8th, watch out for building and construction stocks particularly those in the UEM stable as well as Gamuda etc.
A good cheap stock to watch out for will be AMDB. For the agricultural sector, watch out for
Welli-Multi Corporation as it gets budget perks for halal food production and its associated animal husbandry projects particularly the halal gelatin project. The ease
Hadhari got the new slaughterhouse project in Pahang is indicative that it will be a national player sooner than you think. Remember Malaysia is famous for its
wayang kulit. Hadhari will take over the listing status of
Welli soon.
Wall Street should finish in plus territory with minimal gains below 30 points at best.
Let us see how it will pan out tonight.
