Markets Poised to Move Down
Tuesday January 22, 2008
Are the financial markets on the Brink of a significant move Lower Today? This could be one of those days in the markets that we see every generation or two. Will everyone be a seller with few buyers to be found? Will this be a day for the history books much like we saw in the crash of 1929 or will it be more reminiscent of 1987?
The markets in the United States are coming off of a 3 day weekend for the Martin Luther King Jr. holiday. The rest of the world worked yesterday. The markets in Asia have tumbled for the last two sessions. Markets in Europe were down as well. It seems that the threat of recession in the US is being taken very seriously around the world. After all how can you prosper when your best client has fallen on hard times?
Reaction to the economic stimulus plan outlined by President Bush has done little to calm the jittery mood of investors. From my perspective, I will be glad to accept the check, however I view this move by the administration as more of an election year grand standing tactic. Given the magnitude of the numbers involved in the current sub prime credit crunch, $150 billion is little more than a band-aid on a wound spurting an arterial flow. The stimulus is too little, too late, to be effective in avoiding recession.
Futures on the DJIA were off nearly 5% on trading on Monday, Jan. 21. A day when the market was not open. It would seem that a number of traders are betting on a move to the down side today or in the very near future. I for one will be watching very closely as the day progresses.
Global stock markets slumped following the worst week for U.S. stocks in five years after President George W. Bush's $150 billion plan to revive the economy and expectations of interest-rate cuts failed to allay recession concerns. The MSCI Asia Pacific Index today extended its drop from a November high to 22 percent, following Europe into a bear market. By Helen Yuan and Luzi Ann Javier, Bloomberg