Market News

The market was silent but the streets were loud! It was the fourth of July celebration in the US. Fireworks lit the skies. Kids blew their horns. Adults downed their booze. And the market…?

Check out today’s Economic Roundup!

By the looks of it, traders might actually be respecting the holiday commemorating US Independence. The dollar is positive on the day so far.

Daily Economic Roundup – check it out!

Another interest rate decision tomorrow – what will Jean-Claude Trichet and the ECB pull out from the monetary policy hat this time?

A key day reversal is defined by Stockcharts.com as “a one day chart pattern where prices sharply reverse during a trend. In an uptrend, prices open in new highs and then close below the previous day’s closing price.

Consumers are starting to realize that things are not as rosy as they seem. The consumer confidence index slid from 54.8 to 49.3 instead of rising to 55.4 as expected. Concerns about job losses and wage cuts took their toll on the consumers’ outlook for the economy.

We’re still getting mixed signals as a consolidation moves continue. But it looks as though some of the currencies are building up steam; the likely resolution (on technical analysis alone) being a sharp breakout in accordance with the trend prior to consolidation.

The mantra from most commodities guys is a simple: Be long or be wrong. This is a secular bull market in commodities. And up until that little upset recently, a 50% haircut triggered by the credit crunch, commodity bulls have been right on the money.

China knows its symbiotic relationship with the US is over. You remember the one; it was based on US buying likely drunken sailors and China sending its sailors over to drop off container cartons of stuff,

Wondering why the South African rand rallied sharply against the buck yesterday? Me too. Leading into and following the Federal Reserve announcement yesterday, the dollar was stronger versus the pack of majors. So what prompted such strength from the rand?

Remember that thing my barber told about the times… I mentioned it in one of my recent posts… you know… that thing about the current situation… He said, “These are unprecedented times – we just don’t know what’s going to happen.”

We were expecting at least one day of follow-through (actually more) on the green shoot to brown weed re-think, thinking it would benefit the dollar as it did on Monday, but no dice.

The World Bank says contraction will be greater than expected; the global economy will slow by 2.9% rather than 1.7%.

Some days I struggle for things to rave or rant about in this morning missive. Often, after bleeding at the keyboard for an hour or two, something seemingly worth saying pours on to the screen; but there are those days when only the keyboard is stained.

Remember the days when the US was the big kid, “the bully” who no one would stand up to? The one who dominate the playgrounds and take away your PB&J sandwich? Well, it looks like some kids have had enough and don’t feel like giving their lunch money away anymore. Introducing, the new kids from the BRIC-block – Brazil, Russia, India and China!

Since I penned my Comdol falling off a BRIC wall piece the other day, the commodity currencies and oil have of course rallied nicely–they didn’t follow the plan. But, hope springs eternal in the world of investing, and hope also usually gets one into trouble … as we know.

The correlation between stocks and currencies is working; risk-appetite at its finest. But say we didn’t have this connection … say a 0.023% rise in the S&P 500 didn’t equate to the same 0.023% rise in the Australian dollar or euro or whatever.

If you get a chance, we think Martin Wolfe’s piece in the FT today is worth the read, as it compares where we are in this global recession relative to where we were this time during the great depression.

If I happened to know the German national anthem I’d likely break out in song right now before I finished typing up this piece. Oh, by the way, did you hear that German investor confidence blew past expectations in a sign that the recession is coming to a close?