每日市場點評 --- January 16, 2008

The market gave back early gains during the final 20 minutes and the trading activity remained choppy. Both Dow and Nasdaq were closed below key levels at 12,500 and 2,400. Dow is now 1700 points below the record close of 14,164 on Oct 9th while Nasdaq is 16% off from its multi-year high of 2,859. News on the economic front was more or less in-line today. Following yesterday’s benign PPI numbers, today’s CPI number removed some fears of higher inflation that may prevent the Fed from taking aggressive actions. Both Industrial Production and Capacity Utilization data were lower than the previous month but were better than expectation. The demand for US securities was also quite healthy as evidenced by more than $90 billion net inflow in November. On the earning’s side, investors seemed to be relieved following reports by JP Morgan and Wells Fargo as some had feared more damages could be announced. The financial sector provided supports to the market throughout today’s trading. Intel’s revenue warning for the current quarter that came after the market close yesterday, however, put pressure to the tech sector and essentially accounted for the whole loss in Dow.

Stocks were sold off earlier in the day but then a wave of buying activities pushed all three major indices significantly off their lows towards the lunch time. Some attributed the early reversal to rumour that fiscal stimulus package that had long been speculated would be announced soon while others pointed to possible intra-day rate cut before the Fed Chairman Bernanke’s testimony in front of Congress tomorrow. Nonetheless, the rally seemed to have more to do with short-covering rather than real buying. Many emerging market stocks were hammered as investors fear that slowdown in global economy would reduce demands for many commodities. Gold price dropped by more than 2% while oil lost another 1%. Many base metals were also being sold off. The BDI index that tracks bulk-shipping rates continued to slump and now is below 7,000, off almost 40% from its historical high reached in November. Although BDI usually shows some weakness in the first quarter, 40% drop is anything but normal. If recent trend continues, it may really mean some trouble for global economy ahead. Tomorrow we are going to get earning reports from Merrill and WaMu, two key players in recent sub-prime meltdown. In addition, both the Fed Chairman Bernanke and Atlanta Fed President Lockhart are scheduled to speak about economic outlook.