Posted on Monday, 8th June 2009 by admin
US Stock Market
There were a few events on the US stock market last week. The most important is probably the continuation of GM’s nightmare as it is presently splitting the company in two parts (the good one with Chevy, Cadillac, GM and the evil one with Hummer, Saab, Saturn et the deceased Pontiac). Rumors have already been heard about a Chinese company buying Hummer and it should be done by the end of the year. The US Government is injecting 50 billions in this “project” in order to keep as many jobs as possible. We all know that the closing of the biggest carmaker would have an awful impact on the fragile economy. However, stock markets had already predicted the event as they didn’t budge upon the official announcement.
In order to make sure that banks are still giving out loans while paying back the taxpayer bailout, the Fed required a higher ratio of capital for each of them. Despite the fact that banks went through their stress test about a month ago, the Fed want to make sure banks keep doing their primary business; giving loans and providing credit to the US citizens.
Recent job loss stats were welcome with “only” 345,000 job loss in May compared to 520 000 anticipated by financial analysts.
In the end, the Dow jonest went up by 3.09%, the S&P 500 by 2.28% and the Nasdaq by 4.23%.
Canadian Stock Market
Directly related to GM, Magna (a auto part maker) loss 10% of its value on the market due to the bankruptcy of the giant carmaker.
Energy sectors and materials saved once again the Canadian market as the American recession seems under control and is losing its strengths. We all hope to see the light at the end of the tunnel!
Canadian market went up by 1.92%.
Resources, currencies and others…
Next week, we will have to look after the BRIC who will discuss their expansion strategies. As they already started to do so, one of the point of discussion will be the fact that they are slowly leaving the American dollar in order to prioritize their local currency.
Less speculation on the oil barrel as it is “stable” around $68. During the week, we even saw it reached $70 for a short period of time. Natural gas dropped by 10% as investors prefer to jump in the oil barrel train.
Posted in Market Commentary | Comments (1)
June 14th, 2009 at 3:47 pm
[...] -BMSP presents his weekly review of the markets [...]