The financial sector collapsed last night as a worst than expected home sales figure snapped the market out of its trance. The Dow fell 283.
In the view of Standard Chartered the US Dollar remains in a long-term downtrend and will fall further, though not before a sharp rally next year as central banks elsewhere look to stimulate growth.
According to TD Securities the evidence is mounting the commodities cycle is poised for a turn lower, which would reduce inflationary pressures but put commodity currencies under pressure.
Oil fell another US$4 last night, three Dow stocks “beat the Street”, but the Dow managed only to stagger up 30.
The Dow closed up 135 on its late rally last night following news that sent oil falling and financials soaring.
According to TD Securities economic indicators suggest the Australian economy is now close to a recession, meaning risk is to the downside for growth, the currency and interest rates.
B of A beat the Street but failed to ignite the market for a second week as oil bounced. The Dow was down 30 but there were some very poor aftermarket results.
The Dow jumped another 207 last night as oil fell another US$5 and JP Morgan played the star.
The moratorium on short-selling had its effect last night as traders rushed to cover positions in financials. Oil fell another US$4 and the Dow shot up 276.
Standard Chartered suggests the US dollar has been oversold on financial sector concerns and with the US ahead of other regions in terms of policy initiatives the currency may soon strengthen.