每日市場點評 --- February 4, 2008

The market took a breath after running up almost 5% in the past week. Financials and home builders were under particular pressure as some investors deemed the past two weeks’ rally was a little excessive and decided to book profits. Downgrades in several credit card companies (American Express, Capital One and Discover) from UBS and banks (Wachovia and Wells Fargo) from Merrill Lynch were also weighing on the sentiment. Technically, most major indices were about 2% below their 50-ma after last week’s big rally and a consolidation at this point was actually quite healthy for the next upside movement. On the economic front, orders to US factories rose 2.3% in December, the biggest in five months, following a revised 1.7% advance in the previous month. That indicates business spending on new equipments is not slowing despite sub-prime issues in the financial market. Most overseas markets rallied sharply today and China’s CSI 300 Index registered the biggest single day gain after the government allowed the sale of new stock funds. US dollar was lowered against most major currencies while gold price was also down amid profit taking. Energy and agriculture commodities were doing really well today with both corn and soybean hitting new historical high. Later this week, we are going to get interest rate decisions from both ECB and BOE. Currently the market is expecting a no-change decision from ECB but a 25 bps cut from BOE.

Note: I will stop posting Daily Holdings on DQ starting from today but I will keep posting Daily Market Comments.