每日市場點評 --- January 10, 2008

Another roller-toaster day on Wall Street for this Thursday. The market opened the day in red following overall disappointing chain retailer results and decisions by ECB and BOE to keep interest rates unchanged. Despite the negative news, the market quietly moved higher and was traded at around unchanged level before the Fed Chairman Bernanke’s statement was released at around 12:30pm. In the prepared statement, Bernanke mentioned that he would “take substantive additional action” against downside risks. And this was seen as an approval for more aggressive interest rate cuts in the next few months and the market reacted immediately by pushing Dow up more than 200 points from its bottom even before Bernanke started his speech. Then at 1:00pm, Bernanke started his speech. The speech itself didn’t have much new information and was basically repeating the prepared statement. Then in the Q&A session when asked about his personal view about a possible recession in US, Bernanke seemed to dismiss such a possibility and this reaction prompted a wave of selling that pushed the market back to where it started as traders suddenly realized they didn’t really get anything new from the statement(as the market has already priced in more than 80% chance of 50bps cut before the statement was released) and the Fed is not going to take any emergency action before its next meeting at the end of this month. Just when it looked like yesterday’s rally was in jeopardy, rumour that Bank of America’s potential takeover of CountryWide Financial pushed up the whole financial sector and the broad market quickly followed suit. By the closing bell, all three major indices registered almost 1% gain for the day. US dollar dropped against most major currencies as the yield spread is seen to expand following today’s decisions from ECB and BOE. The weak dollar pushed gold price to another record closing. Although I’m bullish of the commodity for the long term, a short term pull back is very likely before it breaks the $900 mark. After the bell, American Express cut its Q4 earning estimation citing slowdown in cardholder spending and rising delinquencies, leading to a 5% drop in the stock during the after-hour trading. The news basically provided new evidence to the fear that the sub-prime issue is going to spread to the rest of the economy and slow consumer spending eventually. Market is set for another test tomorrow…