U.S banking sector health is a concern

Monday, U.S stocks did not work well as there was worry about the health of the U.S banking sector when last week’s collapse of IndyMac outweighed earlier optimism over the government’s plan to stabilize Fannie Mae and Freddie Mac stocks. On the other hand, regional banks were also under fire as investors fretted about the possibility of more bank failures when regulators seized the mortgage lender IndyMac Bancorp Inc following withdrawals by panicked clients. If this situation continues, then there would be real panic in U.S housing economy.

Last week ...U.S stocks

Last week, Fannie and Freddie’s shares were hammered last week amid mounting fears of capital constraints and played a major role in the market’s weekly decline. On Friday, Treasury and Federal Reserve unveiled sweeping steps to shore up the troubled mortgage financing giants if need be and head off a potential meltdown in global financial markets. Fed said the companies could access its discount window for emergency cash. The Treasury separately said that it would temporarily increase its line of credit to the two, as well as purchase equity in them, if needed. The move by the Fed echoed its emergency action to help rescue investment bank Bear Stearns in March, when it opened the discount window emergency lending facility to investment banks for the first time since the Great Depression

Today, Asia Market is dull

Looks like that today is not the day of the Asia-Pacific share-market. The stocks in Asia have slipped when oil prices were high and there is a reminder of rising inflation pressures. The U.S dollar struggled on fears about the potentially underfunded mortgage finance companies. The onslaught of higher commodity prices cited as a reason for high global inflation, showed no sign of letting up soon.

Sine there is tensions in Iraq and those tensions may hamper the oil supplies. When the oil supply is less, the price will be more and if crude prices go high, then many markets will be affected and one such is the Asian-market as well.

Oil Supplies Concern

Tension in IRAQ…..does it affect the oil supplies

Wednesday, Crude-market was flat. Iran’s Missile tests rattled the market confidence and from past two days crude-market was following a sell-off. Traders are concerned that the increased tensions between Iran and West could hamper the oil supplies from the oil rich county. The Government’s weekly report on oil inventories showed that the crude stockpiles fell more than expected the earlier week. Energy Department said crude stocks fell bigger than expected by the analysts. So the crude delivery for August settled 1cent higher on New York Mercantile Exchange.

So the supply of Oil is in Iran’s hands. So will the tensions hamper the oil supplies?

Downturn in S&P

On Wednesday, the U.S stock-market saw a “critical” downturn. The stocks did not do well as the market was full of volatility. S&P500 was dragged into bear market as worries about more credit losses would hurt the financial companies. On the other hand, Cisco systems led the technology shares lower when its CEO raise fears of an extended economic downturn.

S&P500 did really saw a drastic change in itself as the bear-market pulled the major U.S stock indexes in it. U.S stocks have been tossed up for months by the credit crisis and severe U.S economic slowdown.

Well at the end of the day, all the major stock indexes in U.S share-market fell more than 2percent. Now its time to see how many days the bear-Market will hold the S&P500?

European stocks..are they ok?

European stocks pared losses as rising oil and metals prices lifted earnings prospects for commodity producers. U.S. index futures were little changed, while shares in Asia advanced.

Royal Dutch Shell Plc, Europe's biggest oil producer, climbed in London. BHP Billiton Ltd. led mining companies higher as copper, nickel and lead rallied.

Europe's Dow Jones Stoxx 600 Index fell less than 0.1 percent to 316.42 as of 12:03 p.m. in London, after dropping as much as 0.3 percent earlier.

The index, which has lost 1.9 percent this week, has retreated 21 percent from a six-year high a year ago as record oil prices, higher inflation and credit-related losses approaching $400 billion threaten to push the U.S. into recession.

Asian stocks are up

Exporters of Cars, Electronics have led the Asian stock market to take an upswing in its trading session. Japanese and South-Korean Automakers increased their sales in U.S and dollar is advancing. Asian Carmakers have outsold the three biggest U.S manufacturers for the first time and this has made the Honda Motors increase its share-value to six-months high in Tokyo. Sony Corp also advanced when Federal Reserve chairman Ben signaled that he is done with cutting the interest rates by driving the dollar to a near three-month high against the yen. Bernanke said yesterday interest rates are well positioned to promote growth and stable prices. The central bank is working with the Treasury to monitor foreign-exchange markets and is aware of the effect of the dollar's decline on inflation and price expectations. Sony gets about a quarter of its sales from the Americas while Toyota generates about a third of its sales from North America.

why U.S stocks down?

U.S stocks dropped on the concern that the economy would be weakened as banks and brokerage face deeper losses and record energy costs depressed consumer spending. Many financial companies have lost as their estimates were wrong and the Federal Reserve signaled that it would stop cutting interest rates. Oil was record high at $135 a barrel and home sales were recor low and as such consumer stocks dropped. S&P 500 was down; all the 10 industries have declined bringing the U.S benchmark to the lowest level.

crude oil in high-stands

Crude oil started off on a positive note. It rose to $135 a barrel when U.S stockpiles dropped unexpectedly and traders closed losing trades on bets that prices would fall. Oil has risen 19 percent this month as analysts have increased their price forecasts because of supply constraints and demand growth. Everyone's jumped on the bandwagon and there's agreement that $200 is possible and that's getting more people into the market. They have very little supply cushion going forward and that's playing into the minds of investors. Rising oil prices are starting to affect other areas of the economy, particularly the transportation industry. There are rising concerns it will slow growth as increases in fuel cause costs to surge.

Euro on high note

Euro rose to the highest level in more than three weeks against the dollar and the U.K. pound after an industry survey showed German business confidence unexpectedly increased in May. Experts in London said: “ifo obviously shows the German economy is very resilient and is in a much better position than the rest of the world and the Euro will appreciate again and start hitting new all-time highs on the back of the resilience of the German economy.'' The Euro climbed to $1.5717 from $1.5646 yesterday. It also advanced to 79.97 pence per pound from 79.49. Yen climbed to 103.37 per dollar from 103.68.