Ping-Ponging World Stocks

March 30, 2011 James Heinsman Hedge Fund News

There’s bouncing and then there’s mega-bouncing. It seems like global stocks don’t know which way to turn next and just keep on bouncing around. One minute things are looking great and people are ready to pop open the champagne and at other times it looks like a disaster and depression looms. So what is really going on – at least for today – in the markets?
Today we are trying to downplay global financial worries connected to the Japan disaster and unrest in the Arab world. The yen dropped a 10-month low against the euro. It seems also European and American interest rates are on the up. Indeed, officials from America’s central bank have said that they do not need any additional bond purchases for the economy whereas in Europe it looks pretty certain that rates will increase next month which definitely indicates good news. Emerging markets seem to be doing pretty well too amidst the backdrop of global turmoil, unrest and uncertainty; it appears there has been an increase in these of over 1 percent.

Political Turmoil Doesn’t Help

Of course when the political environment is up in arms it’s not great news either. With revolts in both the Middle East and North Africa, stability isn’t quite the world on the tip of everyone’s tongues vis-à-vis the global economy. According to IG Markets analyst, Ben Potter, “the two big geopolitical stories — the aftermath of the earthquake in Japan and unrest in Libya — remain very much in play but with the backdrop not changing significantly on a day-by-day basis, it does seem as if markets are now keen to try and turn the page.”

Nasdaq Nails It

Still, there has been some good news in recent days. As noted above, all this bouncing is pointing in the direction of economic instability. The Nasdaq Composite gained 24 points coming in at 2,755. Indeed telecom stocks were surging due to “continued optimism about consolidation in the industry after AT&T’s bid for Deutsche Telekom’s T-Mobile USA. A deal would create the country’s largest phone carrier. AT&T gained 1.8%, and Verizon Communications added 1.7%.” AT&T went up 1.8 percent with Verizon Communications adding 1.7 percent.

Japan’s Not Jesting

Naturally Japan isn’t going to be smiling at this point. And unfortunately their stocks are doing a lot more down – than up – bouncing recently. Worries about radioactive Fukushima plant leaks haven’t helped the matter and the country’s Nikkei Stock Average went down 0.2 percent at 9459.08. But it doesn’t seem like all of Asia is suffering as a result of this. Indeed, stocks in India increased “for a sixth straight session” following a drop in crude-oil prices which meant there was less concern over inflation.

So there is some good news on the horizon but nothing seems all that stable right now. It seems Japan is doing the very best it can amidst a long road of recovery but that as we all know, global stocks and economic climate is – even under relatively stable world conditions – subject to a constant ebb and flow.

Asia, AT&T, Ben Potter, euro, Japan,

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