The market is down , up , down ,, up.......
AFTER eight sessions in the red, the share market was finally trading back in the black at midday, boosted by financial stocks.
This year seems to have started with a rocky start and thats what all the analysts are saying it is goin g to be for the rest of the year. Goldman sachs is saying we should be picking stocks that is not sensitive to interest rates , and what may those sectors or stocks be
Apparently they should be the defensive stocks like
We should be looking for companies with robust balance sheets and non -cylical earnings.
Bell potter securites says that comnpanies with strong balance sheets, cash flow and earnings per share growth performed well in times of slow economic growth
Popular Investment firms analysts says these stocks are good in such conditions
CSL - Blood and vaccine products
WOW - Woolworths Retailers
Coca cola Amatil
St george bank
Companies that have free cash flow that exceeds thier dividend yields payouts are aq good bet.Stocks offering strong balance sheets and non-cyclical earnings have become a focus. Morgan Stanley has identified a number of defensive stocks that satisfy these criteria, includingBeach Petroleum, Woolworths, CSL and St George Bank
Interest rates look set to rise next month as tight labour market conditions continue to fan inflationary pressures in the economy.
Since the high point of mid-October, the market is down 939 points and analysts say there is more downside to come.
Evidence that the equities nerves were not about to settle came last night as the London market eased another 1 per cent, after the 3 per cent drop on Tuesday night.
There was feverish selling of stocks throughout the region. The Hang Seng index in Hong Kong sank 5.4 per cent and the Nikkei hit its lowest level in more than two years, losing 3.34 per cent.
"People aren't worried about the volatility, they are worried that all the market is doing is going down," Macquarie interest rate strategist Rory Robertson said last night.
The global commodity markets have been caught up in the international equities problems, despite recent solid strength.
The prospect of a global growth slowdown prompted investors to sell down commodities in London. Three-month copper futures lost 3 per cent and the price of oil slipped by $US2 a barrel. The recent gold rally halted in Asian trading as investors went to cash, causing the price to drop sharply from $US909.50 to $US882.10.
UBS Sydney chief strategist David Cassidy said domestic stocks would fall further if the US went into recession.
There was speculation in the financial markets yesterday the US Federal Reserve was about to convene an unscheduled meeting to slash the funds rate in a desperate bid to save the US economy from tipping into negative growth.
Analysts said they don't expect a return to normal market conditions in the near term. The latest fright for investors was Citigroup Inc reporting an $18.1 billion write-down -- largely on collateralised debt obligations -- and a $9.83 billion quarterly loss.
"We need two things," said Craig Saalmann, a credit strategist at JP Morgan. "We need to be comfortable with U.S. investment banks, they need to come clean and recapitalise and secondly, we need more data about the U.S. economy."
- The sharemarket closed lower on Thursday, making its ninth consecutive negative close for the first time in more than 12 years.
- Tokyo shares rose 2.1 per cent on Thursday, bouncing back from a two year low as a firmer dollar helped ease fears about an American recession but plenty of caution remained in a very volatile Asian session.
- The Australian dollar held around 88 US cents on Thursday, recovering from a one-week low hit offshore, with robust domestic data pushing it higher but lingering risk aversion checking gains.
- The dollar held overnight gains against the euro on Thursday after comments by a European Central Bank official fuelled fears that American economic weakness might be spreading to Europe.
- Gold extended losses from a record high on Thursday, surrendering as much as $US8.60 an ounce as the dollar held on to its gains against the euro before testimony by US Federal Reserve chairman Ben Bernanke.
- 1:49PM | By Anthony Hughes
- Get the latest on what the key market players are talking about
- Following is a summary of broker changes to their company recommendations and upgrades and downgrades to earnings estimates.
- 17 Jan 2008 | By Zoe Fielding
- Margin calls could hit record highs if markets continue to fall this month, according to financial institutions.
- 02:29AM | By Edited by Anthony Hughes (email@example.com)
- The Australian Competition Consumer Commission's call for submissions on Sumitomo Forestry's bid for Carter Holt Harvey's $2 billion sale of its wood products business is further proof that the deal is not dead.
- Stocks fell on Wednesday with Intel's disappointing outlook dragging the S&P 500 to a 14-month low.
- The euro fell sharply on Wednesday after a European Central Bank official warned that growth in the 13-nation region could be slower than expected, fanning fears that US economic weakness might be spreading to Europe.
- US Treasury debt prices eased on Wednesday as investors cashed in on a string of gains that had pushed benchmark yields to a more than four-year low.
- Growth in the US slowed in the final weeks of December amid subdued holiday spending, according to the latest survey of economic conditions compiled by the Federal Reserve.
- Britain's leading sharemarket fell 1.4 per cent on Wednesday, caught in the swirl of rising US recession fears.
- Copper prices slid to one-week lows on Wednesday as investor confidence crumbled in the face of a deteriorating outlook for global economic growth and demand for the metal used in power and construction.
- 04:25AM | By Glenn Mumford
- The market looks to be telling us that the world as we know it is about to crash and burn.
- 04:36AM | By Peter Wells and Eli Greenblat
- The sharemarket suffered its steepest loss of the year yesterday, continuing an eight-day losing streak that has wiped almost $100 billion off the benchmark index.
- 04:25AM | By Katja Buhrer
- Investors who thought the Australian dollar's rise above US90¢ this week had put the currency back on a rising trend were wrong-footed yesterday, following a US2¢ drop in the local unit.
- 04:26AM | By Stephen Wyatt
- The panic buying that has sent gold and crude oil to record levels in the past month has turned into panic selling as fears mount that a slowdown in the United States economy will crimp demand for commodities.
- 17 Jan 2008 | By Gabriella Hold
- Small-cap stocks usually aren't at the top of the list for most investors but thanks to the meltdown in global markets, the sector is grabbing attention for all the wrong reasons.
- 02:26AM | By Alex Boxsell; Michael Smith
- Shares in port and rail infrastructure group Asciano have travelled an uncertain path so far in 2008 amid market speculation of a potential assets sale.
- 17 Jan 2008 | By Alex Boxsell
- Retail sales remain buoyant even as housing cycle turns
- 17 Jan 2008
- S&P 500
- 17 Jan 2008 | By Edited by Andrew White (firstname.lastname@example.org)
- All change at MFS - including the name