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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: maceng2 who wrote (23961)	10/6/2002 5:56:33 PM
From: oldirtybastard	Read Replies (1) \| Respond to of 74559

yup, point taken. funny how if we were having this conversation some thousands of years ago the dude in question might be Zeus, not HeyZeus, isn't that ironic? at least those people had some interesting, immoral gods to look up to, now you got all these serious martyrs and carpenters and who knows what else not sure about monday, don't really care, everything is gravy now -g-

To: maceng2 who wrote (23961)	10/7/2002 1:34:16 AM
From: maceng2	Read Replies (1) \| Respond to of 74559

Preview: Brazil election could hit markets By Kevin Morrison Published: October 4 2002 19:34 \| Last Updated: October 4 2002 19:34 All eyes will be focused on market reactions following Sunday's presidential elections in Brazil. Luiz Ignacio "Lula" da Silva, the former metal worker who looked well placed in the elections last week, does not receive many votes in the financial markets. This year the Brazilian Real has fallen 38 per cent and the spreads on government bonds have widened to more than 20 percentage points above 10-year US Treasuries on fears that the one of the world's top dozen economies may default on its $260m of government debt. Investors fear an outright Lula victory could give his Workers Party a mandate for change at the expense of pragmatic economic management. Ian Stannard, foreign exchange strategist at BNP Paribas said the markets are very wary of Lula but are becoming more used to the prospect of his victory. "I think there could be some relief after the election, particularly if Lula makes the right noises to the markets," Mr Stannard said. Emerging market debt has become an issue again as the global recovery has faltered and war in Iraq has come closer. Concerns of a debt default by Brazil were triggered by the $95bn default by its neighbour Argentina, the biggest of the six countries to have defaulted this year. Share price movements to watch in the wake of the Brazilian election are HSBC, JP Morgan Chase, Citigroup, and Spanish banks Banco Santander Central Hispano and Banco Bilbao Vizcaya Argentaria. All have large loan exposure to Brazil. Bank shares have been battered by fears about capital strength and late last week CS Group was forced to make a statement that its "capital resources remain adequate". Investors will also be looking for more developments from Japan and their renewed effort to address the long outstanding issue of problem loans, which represent about 8 per cent of Japan's gross domestic product. More details on the non-performing loans could emerge from the Bank of Japan's two-day monetary policy meeting, which starts on Thursday. Mr Stannard said the yen could come under pressure if the Japanese government shows more aggression on attacking the problem loan issue. BNP Paribas estimates that the Japanese currency could fall to Y125 versus the euro, from about Y121 at present. Last week Heizo Takenaka, Japan's newly appointed head of Financial Services Agency, set up a taskforce to accelerate the disposal of non-performing loans. Mr Takenaka's appointment helped trigger a slide in the Nikkei 225 last week to under the 9,000 level for the first time in 19 years. The European Central Bank and the Bank of England are both expected to leave rates unchanged on Thursday, disappointing bond market investors who have already priced in rate cuts of 25 basis points for each central bank. Although recent eurozone economic data show that production is slipping and confidence is waning, there is little chance of a cut to the 3.25 per cent rate, unchanged since last November, as eurozone inflation is running above the ECB target of 2 per cent. Ian Stewart, Merrill Lynch chief European economist, said: "The irony is that Europe needs a cut more than the UK, but the Bank of England has more scope to cut." However, hopes of a immediate UK rate cut were dashed on Friday when domestic property price inflation rose at a record pace in September and mortgage equity withdrawal hit its highest level since 1988. Major US reports due during the week include September's retail sales and the producer price index, both out on Friday. The third quarter corporate earnings season starts in earnest with Pepsi, Yahoo, Dow Jones, Juniper and General Electric all reporting. Indications for the impact on the equity market from corporate earnings are not good, given the recent spate of warnings from Dow Chemicals, Advanced Micro Devices, EMC and Schering-Plough. BNP Paribas said in a recent note that the outlook for US corporations in the third quarter was gloomier than the second quarter. Of the S&P 500 companies that have provided an outlook for the third quarter, 59 per cent gave a negative outlook and 18 per cent have been positive. In the second quarter, 46 per cent companies have negative outlooks and 31 per cent positive.