The ride on Wall Street has gotten bumpier over the past week as economic and credit jitters have intensified, but the stock market has managed to hold fast in the face of turbulence.
The market managed to ride out with little damage news of a government rescue of mortgage giants Fannie Mae and Freddie Mac as well as possible meltdown at investment giant Lehman Brothers.
In the coming week, a US Federal Reserve meeting will be a focal point as the market looks for assurances the central bank will continue its stimulative monetary policy.
Amid the turbulence, the market managed to end the week in positive territory.
The blue-chip Dow Jones Industrial Average rose 1.79 percent for the week to 11,421.99 and the broad-market Standard & Poor’s 500 index increased 0.75 percent to 1,251.70.
The technology-heavy NASDAQ composite eked out a gain of 0.23 percent to 2,261.27.
The resilient performance on Wall Street, some say, suggests the market is not overreacting to the latest economic and corporate woes and hoping for a possible recovery in the coming months.
“As they say, it’s always darkest before dawn,” said Avery Shenfeld, economist at CIBC World Markets. “The skies over the US economy have materially darkened in recent days, giving fodder to those who have been crying recession, and crying wolf thus far given how strong the economy proved to be this spring.”
Shenfeld said low interest, the impact of the government stimulus and a likely “bottoming” in home prices will leaded to “a 2009 sunrise.”
Mark Zandi at Economy.com agreed that the gloom may be an overreaction.
“The current tone of pessimism seems overdone,” he said. “Despite the tumult, the bottom for the housing market, financial system and economy is coming into view. The US still faces a painful slog, lasting well into 2009, but by this time next year a self-sustaining economic recovery is expected to begin.”
A bright spot for the economy is the sharp drop in energy prices, with crude oil dipping below US$100 a barrel from records above US$147 earlier this year.
This offers a variety of benefits, boosting consumer spending power and easing inflation.
“Lower energy costs, with crude oil prices off 30 percent from earlier highs, have begun to impact the economy, with the effects likely to build in coming weeks,” Bank of America economist Peter Kretzmer said.
The softer inflation will also ease pressure on the Federal Reserve, allowing the central bank to keep its stimulative base rate of 2 percent in place to nurture along a weak economy, Kretzmer added.
Bond prices were mixed. The yield on the 10-year Treasury bond fell to 3.370 percent from 3.660 percent a week earlier, and that on the 30-year bond rose to 4.326 percent against 4.276 percent. Bond yields and prices move in opposite directions.
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College
RSS