Daily FNArena News - FYI

Weekly musings by your editor. This week he looks into positive and negative earnings surprises in the August results season thus far.

Panic gave way to simple anxiety on Wall Street last night as the only news of any consequence was a fall in the oil price.

The Australian branch of the Alternative Investment Management Association released its latest guidelines for hedge fund disclosure on August 16, in an unfortunate bit of timing.

Mixed, with a lack of conviction, is the way last night’s trading US stock markets could be described as the Dow recovered early losses to finish higher. We are now playing a waiting game.

Comparisons with 1998, and a quick look at the upcoming mortgage reset situation in the US, suggest today’s rally hasn’t necessarily marked a bottom.

This week is virtually devoid of data from the US, which might be a good thing, while Australia is not laden either, but this is Week one of the two busiest results weeks.

The US Fed back-flipped on Friday, declaring an appreciable downside risk to the US economy. In cutting its discount rate, the Fed sparked a 233 point rally in the Dow.

In an extraordinary night that followed an extraordinary day, commodity prices collapsed, US bond yields were clipped, the yen accelerated its buyback and Wall Street found a bottom.

Extra musings from your editor. Will Friday bring the positive turnaround for Australian shares?

Danske Bank offers an economics lesson as to what a financial crisis is while suggesting it is too early to know if we are currently experiencing a full blown crisis or merely a correction.