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Markets
- U.S. Auto Industry Desperate For Government Bailout - Editor, 31 October 2008 - No Comments yet
- Hedge Funds Take Strain In Volatile Market - Editor, 28 October 2008 - No Comments yet
- Corporate Results Drag Market Down, World Financial Crisis Summit May Restore Hope - Editor, 23 October 2008 - No Comments yet
- Fearful Stock Market Traders Keep Eye on VIX - Editor, 20 October 2008 - No Comments yet
- Markets Remain Apprehensive as U.S. Bailout Plan Rolls Out - Editor, 15 October 2008 - No Comments yet
- Is Downward Spiral Heading for U.S. Stock Market Timeout? - Editor, 10 October 2008 - No Comments yet
- Emergency Measures by Fed Hope to Boost Market Confidence - Editor, 7 October 2008 - No Comments yet
Further to Wednesday’s article (see "General Motors Seeks Government Aid For Merger With Chrysler"), a Bush administration official revealed late Thursday that the Treasury is not negotiating with automakers on any bailout deal. No reason was given for the decision, but the general consensus among people in the know, is that the Treasury is unwilling to pump large sums of taxpayers money into assisting a merger which would undoubtedly result in the loss of thousands of taxpayer’s jobs, with some estimating the potential job loss figure across the automotive industry to be as high as 90,000.
A report by the Bank of England on Tuesday noted that bank credit risks have been reduced and money market pressures have eased off following the recent financial sector bailouts across the United States and Europe. However, the report added that risks in the broader financial system remain, with hedge funds being particularly vulnerable in the current global financial crisis. An increase in redemption requests has put hedge funds under additional funding pressures, resulting in the third quarter of 2008 being one of the worst recorded by hedge funds.
While U.S. credit markets seem to be loosening up a little, investors have no respite from anxiety as the trickle of third quarter corporate results currently being released seems to be turning into a torrent of bad news. Fears of the country entering into a deep recession cannot be put to rest, especially in light of the fact that many corporate companies are trimming their fourth quarter earnings forecasts, indicating expectations of a bumpy road ahead. All major U.S. indexes dropped by more than 4 percent on Wednesday, with the Dow Jones industrial average ending the trading day with a loss of 514 points, or 5.69 percent, while the Standard & Poor’s 500 index dropped by 6.10 percent and the Nasdaq composite index fell by 4.77 percent.
After a number of gut-wrenching free falls and sharp reversals in the stock market in recent weeks, traders are hoping that tales of impending doom won’t become a reality. A lot of them are paying attention to the VIX, something that is normally considered a rather obscure index and which is generally barely worth noting.
Following the euphoria of Monday, U.S. markets drew back a little on Tuesday with the Dow Jones Industrial Average, the Standard & Poor’s 500 and the Nasdaq composite index all ending the trading day down by 0.8%, 0.5% and 3.5% respectively. While investors are hopeful that this is an indication of a return to some sort of normalcy, given the extreme volatility of markets in recent months, they may very well be hoping in vain.
Thursday marked the anniversary of the stock market peak experienced in October 2007, and illustrating how volatile and unpredictable stock market trading has become, the Dow Jones industrial average plummeted to a level that has not been seen in the past five years. Despite the best efforts of world leaders to halt the global financial crisis - the latest being a cut in interest rates by the U.S., U.K., China, Canada, Switzerland and Sweden - it appears to be unstoppable. Words such as “fear” and “panic” have crept into the everyday vocabulary of stock market players and the informed public.
Before the day even began, stock market players knew that Monday was going to present enormous challenges. With unanswered questions as to how the $700 billion financial sector bailout plan would be put into action, and how quickly the economy would see any benefit from it, Monday proved to be a rocky road for U.S. markets, and global markets did not fare any better. News of European financial institutions Hypo Real Estate AG and Fortis NV having to be rescued, only served to make a bad situation worse, as did the ongoing speculation that authorities in Europe are setting up a bailout package of their own.
Recent Videos
- Video: Recap: Ken Lewis Speaks - Thursday 20 November 2008, 9:16 pm
- Video: Final Word - Market Close 11.20 - Thursday 20 November 2008, 8:59 pm
- Video: In-Depth Look: Growth of ETFs - Thursday 20 November 2008, 8:44 pm
- Video: Sector to Watch: Technology - Thursday 20 November 2008, 8:34 pm
- Video: Bipartisan Agreement Reached for Automaker "Bridge Loans" - Thursday 20 November 2008, 7:36 pm
Recent Articles
- U.S. Auto Industry Desperate For Government Bailout - Editor, Friday 31 October 2008
- Hedge Funds Take Strain In Volatile Market - Editor, Tuesday 28 October 2008
- Corporate Results Drag Market Down, World Financial Crisis Summit May Restore Hope - Editor, Thursday 23 October 2008
- Fearful Stock Market Traders Keep Eye on VIX - Editor, Monday 20 October 2008
- Markets Remain Apprehensive as U.S. Bailout Plan Rolls Out - Editor, Wednesday 15 October 2008
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