每日市場點評 --- January 2, 2007

Happy New Year! The first trading session certainly didn’t give investors a good start. All three major indexes finished the first session of 2008 in a negative tone with Dow leading the way down by more than 200 points. The market opened modest positive but quickly turned into negative at 10am, when the ISM index came at 47.7, the lowest reading since Apr 2003. For ISM index, a reading below 50 indicates recession in the manufacturing section of the economy. Although one month data didn’t represent a trend, the possibility of a recession was certainly increased. The news also sent the dollar lower as traders now bet more than 100% chance of a 25bps cut in the Fed meeting at the end of January. Commodity prices, on the other hand, moved sharply higher following the weak dollar. Oil price finally touched $100 benchmark and closed the day up by almost 4%. Gold shot up by more than $20 dollars and settled at a new historical high price. Treasury bonds rallied sharply as investors were afraid of imminent recession while equities were broadly sold off. Tomorrow will bring in the ADP report, which will give us a preview of the job market condition. The market will pay more attention to the Non-farm payroll number on Friday. If we get a weaker than expected reading in the job report following today’s weak manufacturing report, then the economy could be in real trouble.