EVENTS THAT COULD MOVE THE MARKET IN COMING WEEKS
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What a week? To quote a friend of mine who emailed me on Monday, "Holy
Sh%#!"
I could not say it any better myself, but let me expand on his point.
The performance of the stock market hinges now, more than ever, on the
reaction of individual investors. Over the past five years individual
investors have religiously bought the dips. In August, many investors
adopted a "Sell the rally" mentality. What "they," or rather "we," do over
the coming months will determine the direction of the market.
How Have Investors Reacted This Week? A Summary From Monday And Tuesday
Investors Are Moving Money Away From Big Stock Funds
"Fund shareholders at Fidelity Investments, Putnam Investments, Franklin
Resources, Strong Funds, Janus Capital and T. Rowe Price Associates Monday
were shifting money out of hard-hit stock funds and into safe, but
low-yielding, money-market funds."
msnbc.com
Small Fund Investors Hold On, Do Some Buying
by David Callaway
"Fund companies said customer calls were at higher-than-average levels for a
second day and were mostly questions about the market, although some
investors were switching into money-market funds and some were buying equity
funds."
"Investors are clearly being cautious, but there is no exodus from stock
funds and no signs of panic," said Edward Giltenan of T. Rowe Price
seattletimes.com
What Is Behind The Most Recent Market Volatility? Russia, maybe?
Chernomyrdin Rejected
NEW YORK (CNNfn) - "Storm clouds continued to brew over Russia's stock
market and economy Monday after as the Communist-led lower house of
parliament voted to reject Viktor Chernomyrdin as its new prime minister.
The rejection is likely to add to the pressure on Russia's beleaguered
currency and exacerbate the country's economic problems."
cnnfn.com
Meltdown in Russia
More analysis with an overseas (UK) perspective.
economist.com
How The Soviet Union Fell Apart
by Richard Pipes
A little history and perspective on the collapse of the Soviet Union and
birth of Russia.
intellectualcapital.com
A lot of hedge funds with positions in Russia had to sell other positions in
order to cover leveraged losses in Russia. Those sales caused a domino
reaction in markets around the world.
Hedge Funds Miscalculated in Russia: Minding Money
"Hedge fund managers, renowned for taking big risks almost anywhere in the
interest of making money for their wealthy investors, met their match this
year in Russia."
bloomberg.com
Some Thoughts On Political, Monetary, And Economic Reaction To The Stock
Market
Can Market Correction Be Corrected?
by Merrill Goozner
"The panic on Wall Street doesn't necessarily mean hard times to come, but
the way economic policy-makers respond to it could make it worse."
seattletimes.com
Rate Cut May Be Emerging As Market's Salvation
New York Times
"As foreign and domestic investors fled to the safe harbor of the U.S.
Treasury market Monday, talk was growing of a market-calming interest rate
cut by the Federal Reserve."
mercurycenter.com
Dow Dive Stirs Some To Ponder Recession
by Edward Wyatt
"The sharp sell-off in stocks has led a growing number of people on Wall
Street to wonder whether the stock market, often a leading economic
indicator, may be forecasting a recession in the United States."
mercurycenter.com
Market's Turmoil Has Big Spenders Holding Off A Bit
by Christina Duff and Carl Quintanilla
msnbc.com
A Longer Term Perspective On Emerging Markets- ASIA
China has now witnessed a change in power in South Korea, a forced change of
the Indonesian government and growing pressure on Yeltsin in Russia. All of
this political turmoil followed currency devaluations. These political
developments may be a stronger influence on the communists in Beijing than
any economic pressures to devalue. If China can maintain a stable yuan,
that would be a significant positive development for Asia and the world
stock markets. With recent political difficulties in Russia, devaluation
might now be less likely, because of political rather than economic reasons.
What Will China Do?
Why Devaluation Will Not Solve China's Economic Woes
Bradley D. Belt
"Almost a year since the first domino fell, will the Asian contagion claim
its latest victim?"
csis.org
Emerging economies in Asia will have some advantages over the West as they
develop. They will be able to benefit from our hindsight. They will adopt
new technologies far earlier in their course of development. Instead of
laying copper wire across their countries, they will use satellite,
cellular, and fiber optic cable. They may even leap-frog the West in some
technologies, because they will not be married to an older form.
Smart Cards Take Great Leap Forward
"China's vast emerging consumer market is to become the most ambitious
testing ground to date for 'smart cards,' the plastic payment cards that
have an embedded computer chip." China plans to issue 1.5 million to 2
million of the computerized cards next year. Schlumberger Ltd., the New York
City-based technology and oil industry services business, this week
announced it will provide the cards and the electronic machines that process
them, as well as train consumers and clerks to use them.
mercurycenter.com
"A large portion of those who make online purchases in Taiwan are young
office workers, with 41.3 percent of such purchases made by people 16-25
years of age and 49.4 percent made by 26-35 year-old shoppers, according to
a survey conducted by the Market Intelligence Center (MIC) of the Institute
for Information Industry (III)."
nikkeibp.asiabiztech.com
Paul Krugman Provides A Lengthy Analysis Of The Asia Situation
Saving Asia: It's Time to Get Radical
Paul Krugman
The IMF plan not only has failed to revive Asia's troubled economies but has
worsened the situation. It's now time for some painful medicine.
pathfinder.com
We hope you enjoyed this edition of GoInvest Weekly and look forward to your
feedback.
May all your longs go up and all your shorts go bankrupt.
Alex von Streeruwitz
Editor, GoInvest Weekly
Please visit www.goinvest.com for your market data and news.
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