US and Asian Markets Jump While Europe Stumbles

More extreme market volatility continued yesterday as the US markets jumped nearly 6.5% in late trading. Barack Obama announced that Timothy Geithner had been selected as the secretary of the Treasury.

The news induced a buying frenzy. A NYTimes article entitled: “Stocks Soar in Late Trading,” stated that “Earlier this week, Wall Street slid to its lowest point in 11 years after two days of fevered sell-offs effectively erased all the gains of the Internet and housing booms. The Dow closed near 7,500 points on Thursday, and the S.&P. was lower than any point since 1997.”

The Emerginvest heat map (click to enlarge) reaffirms the tough week for world markets:

 

Only the UAE, Germany, Uganda, and China were positive for the past week before Friday (all around 2%).

Citigroup (C) announced that it might consider selling part or all of itself and in response Asian markets were also up across the board (except China which was down -0.72%): Japan’s NIKKEI was up 2.7%, Hong Kong’s Hang Seng was up 3%, India was up 5.5%, and Singapore was up 3% as well.

Europe however was badly hit Friday as most major European exchanges plunged multiple percentage points. The UK was down 2.4%, DAX Germany was down 2.2%, CAC40 of France was down a hair over 3%, and Belgium’s Bel 20 was down 4.1%.

A Marketwatch article entitled: “Stocks in Europe slip, dragged by pharmaceuticals,” stated that “The losses came on a day of a gloomy economic report, as the euro-zone composite middling performance managers index slumped to a reading of 39.7 in November from 43.6 in October. Any number below 50 indicates economic contraction,” as well as “Underscoring the economic state of affairs, strategists at Goldman Sachs (GS) said earnings estimates have been revised downward for 70% of the companies in the Stoxx 600.”

Some analysts claimed that the US markets were simply reacting to Barack Obama’s announcement about Timothy Geithner – that the reaction was not necessarily positive or negative, but that it was simply a headline which indicated “change.” This leads the way for a potential downturn in the US markets Monday morning as the decision is weighed.

Comments

[TinyMIghty:]

DOW and Nikkei 225 have been moving like twins recently... Unfortunately, the Japanese market is closed so you can not see the action. But I am very curious to see how other markets are going to move tomorrow nights in Asia.

2008 Nov 23 12:41 AM

[NOWHEREMAN:]

Since Markets are not open simultaneously around the world, there is no way to make an assumption that one will action will lead to another in a different part of the world.

Especially in this rabid VIX orientated market action.

PS Program Traders accounted for 27% of total NYSE trading last week. The tail is wagging the dog.

2008 Nov 23 01:43 PM

[Mr. Boater:]

Geithner is just another Councilon Foreign Relations shill. My bet is on the PPT juicing the market and forcing shorts to cover as PR for their new Boy.
Obama is CFR, Corrigan is CFR, Summers is CFR, Rubin is CFR, Clinton is CFR, Biden is CFR, Bushes are CFR, Cheney is CFR, Kissinger is CFR,
JMP/Chase is CFR----Is their a trend here are am cross eyed??

2008 Nov 23 06:08 PM

[NOWHEREMAN:]

So you are old enough to remember about the CFR or are you subscribing to some newsletters by the oldtimers from the 70's?

Corporate control of the World through a centralized banking system, I think that this was the objective but its been 30 years since Doug Casey and his boys for me.

I think they waited too long. IMHO

2008 Nov 24 02:02 AM