Stock Market Continues To Grow

Market Continues To Grow

At a time when shares in the market started to grow some more, the world’s largest mutual funds fell by 3% last month. It is the largest mutual fund in the world, the American fund Pimco. All this development is attributed to the last round of the FED quantitative features of the QE2 is the idea that the purchase of bonds was not well thought out, especially to help rebuild the U.S. economy.

Mutual fund Pimco

On the other hand, many investors expected the dollar to fall according to estimates made by specialists compared with other currencies, in turn, surprised the financial world through an appreciation of U.S. dollar currency. As a personal statement and also an irony of fate the current market environment seems to build a bond bull market, especially for long-term government bonds (30 years). So we see how ordinary investors continue to buy bonds to mutual funds. One example is enlightening to lately. This type of financial instrument, a term of 10 years has attracted no more no less than 27 billion dollars per month (source Bloomberg).

In order they are different ideas and many American corporations have increased this year dividends reason for investors to be attracted to the shares of these companies. However in the data result that many corporations have had significant increases (some have had records) so that their payments are found in higher dividends. It is a sign of improving U.S. economy. Even some large U.S. banks issued obligations created by rescue plans have gathered several billion U.S. dollars which could be soon to apply the increased dividend. So many analysts say it is actually starting a new bull market for stocks that pay dividends, especially an increased dividend.

Europe seems worried by the new bank of Spain.

Spanish banks, which have greatly contributed to the boom in mortgage loans and loans to developers may need something more than 120 billion dollars, according to the statement from Moody’s Investors Service.

This estimate is based on a scenario in which creditors would require a recapitalization report 1-12%. This would provide stability in case of Spanish banks will have to restore confidence in markets. Even if the banks in question, led by Spain’s largest bank – Banco Santander SA, refused to support such a moment, hardly seems calm the situation in this country. Yesterday the banks shares fell by 2.64% during the day reaching a minimum trading much lower than the closing price. The bank’s share price volatility, the largest in Spain signify lack of evidence of investor confidence in the management of this company.

However, Moody’s calculations show a discrepancy between analysts and Spanish officials on sizing estimates capital needs for the creditors. Bank of Spain – by Governor Miguel Angel Fernandez Ordoñez said he sees a possible financial support than in 2011 and it cannot exceed much more than the sum of 11 billion euros. He relied on the fact that investors have exaggerated perceptions of the economy going from Spain.

Under these statements in the last 2 days last scenario Moody’s expects a recapitalization “relatively moderate” and needs could be 25 billion euros, for a ratio of 1-8%, in line with the country’s rating. There have been rumors among some foreign analysts, that estimated for Spain about a need of 1000 billion dollars, which is already a huge difference. However, as we saw yesterday, the euro retreated slightly after trying a small comeback. Quote Now EUR / USD is trading at a 1.3 rate. Under these conditions, stock markets in Europe are almost in unison given the withdrawals from the reference level recorded the previous day.

Stock Market Analysis

Euro Stoxx 50 2841.99 -19.68 -0.69% Pr
FTSE 100 INDEX 5882.18 -9.03 -0.15%
CAC 40 INDEX 3880.19 -22.68 -0.58%
INDEX DAX 7016.37 -11.03 -0.16%
Ibex 35 10009.80 -152.90 -1.50% INDEX
FTSE MIB INDEX 20,410.30 -298.31 -1.44%
AEX-Index 350.79 -1.03 -0.29%
OMX STOCKHOLM 30 INDEX 1156.40 0.56 0.05%
SWISS MARKET INDEX 6,560.43 14.59 0.22%

As seen only stock exchange in Switzerland took a contrarian something firmer action than the rest of regional markets. Madrid Stock Exchange graph IBEX35 composite index fell by 1.5% in turn is the largest depreciation and stock markets in Europe. In my opinion the European market reacted normally given to scenarios that Moody’s circulated amount of 120 billion dollars would not be a problem for rescue fund made available by the ECB at about 750 billion to countries that have problems with sovereign debt crisis.

So until we will have a clear situation of the banks and the ‘credit’ rankings in Spain, the  evolution of Europe in particular and other grants from other continents, in general, remains unstable.

Interpretation:

When I said yesterday that evidence Americans tired and that might be for them to test again something thresholds support former thresholds of resistance of this month by the end of the year witnessed a rally, here yesterday Index U.S. S & P 500 decreased by 0.5% reaching in 1235 the section was up temporarily earlier this month.

In my opinion we will wait a few days until we see a clear direction, especially as the U.S. Senate sent a law extending Bush’s tax incentives in the Chamber, and there are certain things not because of “opposition” Democrats for Obama. Simultaneously, as we saw in Europe to announce new fears, in fact early on further bailouts, whose needs are not known yet, besides that if countries that have benefited so far (Greece – where there’s a strike and Ireland) will succeed in managing the problem.

So we expect some clouds and not know what “dimension” and the influence they have on the stabilization of financial markets in general. In this situation the evolution will be sideways for foreign exchanges, unfortunately still with a slight tendency to adjust current perception.11