Major Market Movers: Another US Downturn

Daily Forex Fundamentals | Written by Crown Forex | Sep 18 08 07:28 GMT |

It's a combination of the endless slump in the housing sector and the lost confidence in the financial sector, even with all actions taken by the feds besides the acquisitions and mergers that won't be able to salvage the US markets.The more fall downs and layoffs taking in this sector will reflect directly on the US economy where the Americans will hesitate more changing their behaviors which would eventually lead to curbing the overall output levels. Last night, the American stocks lost all of the gains that was recorded on Tuesday, with the three main indices plunging with more than 4%, affected by the sharp rally in the financial sector stock, where Goldman Sachs and Morgan Stanley stocks plunged heavily as now rumors spread out that those two investment banks need a merger just to keep on going not falling down like Lehman Brother. Negotiations varies, according to the Wall Street New Paper Morgan is talking about merging with Wachovia Corporation, in addition to some other potential candidates offering some deals to John Mack, Stanley's CEO. Could we call it a 'Black Week'; the stocks after recovering slightly fell again to a three years low, Dow Jones Industrial Average fell 4.06% or 449.36 points to close at 10609.66 levels; while S&P 500 plunged 4.71% or 57.20 points to close at 1156.39 levels; finally NASDAQ fell the most 4.94% or 109.05 points to close at 2098.85 levels. Indices fell heavily the S&P 500 plunged since the beginning of the week with more than 6%, also Dow Jones Industrial average plummeted about 6.34%, where NASDAQ rallies heavily to the down side falling about 7.19%. Drained liquidity, the bad news released from the United States is preventing the US banks from giving out money, as they are now hesitate due to the increasing fall downs in this sector, pressuring the Libor rate to gains higher to record levels. If those pressures continues and cash becomes scarce in US markets the situation will worsen and fall down in the banking sector will increase, which would eventually lead to affecting the overall expansion in the states, affecting the global growth. With the financial sector continue to weaken, fundamentals from the American territory started to struggle after recovering slight in the past month. Our agenda contains some various data for today; starting with the Initial Jobless Claims, expectations shows that claims rose to 440 thousand coming slightly better than the previous 445 thousand claims, yet the increasing layoffs from the failing financial sector is threatening those levels to escalate higher, yet they won't be seen this week as we might see it in next upcoming weeks reading. Also the decreasing demand on the industrial production from the slowing growth had curbed the manufacturing levels, where today the Philadelphia feds index will clear out that condition remain to be dreadful, taking the reading in September to a minus 10 levels yet slightly better than the previous boosted by the depreciation in oil prices, but according to the past weakness in the Empire manufacturing reading I can say that worse than expected reading in this index might be possible. Finally my dear each day more downturns in the financial sector are coming out to the surface yet we don't know when this Crisis will end and what will be the bottom, keep your eyes open my reader just to see if the feds will continue running to salvage the falling banks or firms just to tranquil the raging markets. Crown Forex disclaimer:The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver &energies presented should be considered speculative with a high degree of volatility and risk.