China's Wen: Second Global Downturn Possible

hinese Premier Wen Jiabao warned on Monday that global economic growth remained vulnerable to sovereign debt risks and the possibility of a second downturn, while saying his own country's growth remained on track.Wen mentioned problems of countries including Greece and added: "Is this phenomenon over? Now it seems that it is not so simple."

Frederic J. Brown | AFP Getty Images Wen Jiabao

Referring to the risk of a second dip in global economic growth rates, Wen said "I believe that we can't say with absolute certainty, so we must undertake close observation and act to prevent it."

He said it was too early for economies to consider exiting from their stimulus spending. Read more

Forex -Eurousd Failed to form double bottom.

With Euro failing to form the double bottom, this indicates a bearish sign. Expect Euro to drop to a new low.

Spain Loses AAA Rating at Fitch as Europe Battles Debt Crisis

By Esteban Duarte and Emma Ross-Thomas

May 29 (Bloomberg) -- Spain lost its AAA credit grade at Fitch Ratings as Europe battles a debt crisis that’s prompted policy makers to forge an almost $1 trillion bailout package for the region’s weakest economies.

The ratings company cut the grade one step yesterday to AA+ and assigned it a “stable” outlook, according to a statement from London. Spain has held the top rating at Fitch since 2003. Standard & Poor’s lowered Spain’s ratings to AA on April 28. Read more

Forex-Eurousd : Double bottom ??

Is Euro forming a double bottom as shown on the daily chart? But the 4 hourly chart does not seem to form a proper double bottom. Well, let see whether it will be able to cross the neck line. If it fails to form a double bottom, it is a strong signal to short.

Halftime: Key S&P Level That Could Break Bulls

I can’t feel bullish unless we close above 1100.

The market found support at 1040, adds Guy Adami, and I agree that it wants to test 1110. But as we approach that level I’d layer into selling positions. Ultimately the next big leg is probably down. Or you can play it with a long position in the Vix [VIX 29.68 -5.34 (-15.25%) ] because I expect to see a spike in volatility.

That’s a great point, adds Steve Grasso. I can see investors getting lured back into the market at 1100 only to have their face ripped off.

I’m long the Vix, adds Patty Edwards. I didn’t like the action in the market on Wednesday and expect more volatility lies ahead. Read more

Market Outlooks: Volatility, 1,000 Point Dow Drop in Next Month

Stocks jumped at the open and kept climbing on Thursday, following the previous session's late-day selloff. Can the markets hold the gains until the close? Christopher Hobart, CEO and founder of Hobart Financial Group, and Tyler Vernon, chief investment officer at Biltmore Capital, offered their insights.

“I’d love to tell you that the storm is clearing, but I think that’s a dream right now,” Hobart told CNBC.

“We’re looking for significant volatility over the next couple of weeks and months, and the average investor needs to be very careful right now.”

Hobart said he sees a downside risk of 500 to 1,000 point drop on the Dow over the next month, if the global issues such as the sovereign debt crisis in Europe and lending policy rumors in China don’t get resolved. Read more

Stock Prices to Fall Further—So ‘Sit and Wait’ Before Buying

Market opportunities seem plentiful—but resist temptation and wait for prices to fall further, says Beat Lenherr, chief global strategist at LGT Capital Management.

“I wouldn’t put any fresh money into the market at this time," Lenherr told CNBC.

"We’re going to see more opportunities later on...So in a nutshell, sit and wait and see would be the right thing to do.” more

Jittery investors bring down Bursa for eighth day

he Malaysian stock market lost more than RM51 billion in market value over the past eight days as the global economic uncertainties rattled investors.

The entire market value of the local bourse is below the RM1.02 trillion level, from RM1.07 trillion eight days ago. The amount lost is equivalent to more than three times that of the 10 biggest public-listed companies' most recent full-year net profits of about RM16 billion.

The benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) fell for the eighth consecutive day yesterday, its worst losing streak since 2008, closing 1.85 per cent lower at 1,250.13 points, its lowest close in more than two months.

Over the past 30 days, only two FBM KLCI component stocks have seen gains: Astro and DiGi.

Read more: Jittery investors bring down Bursa for eighth day http://www.btimes.com.my/Current_News/BTIMES/articles/mkt2505/Article/#ixzz0p5KaKzXc

Wall Street withers late on euro worry

Chuck Mikolajczak

NEW YORK

Wed May 26, 2010 5:36pm EDT

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Live Chat

The slumping euro

Worried about the euro? Curious about the outlook for the dollar? Join Reuters markets commentator Kevin Weir for a live Q&A on Thursday at 3:00 pm ET. Live Coverage

(Reuters) - Wall Street staged yet another late-day reversal on Wednesday to end lower as news suggesting China was reassessing its euro-zone debt holdings pushed investors into profit-taking mode.

CHINA

The Dow closed below 10,000 for the first time since February 8. The late turnaround in stocks showing investor psyche remains fragile, and investors are inclined to sell strength in this volatile rumor-driven market.

The Financial Times said representatives of China's State Administration of Foreign Exchange, which manages the reserves under the country's central bank, has been meeting with foreign bankers in Beijing in recent days to discuss the issue.

"There is still nervousness out there. Yesterday's turnaround does not mean the market correction is over or that investors are confident about the direction of European policy or the success of European policy," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York. Read more

Forex-Eurousd fell below fib 61.8.

As predicted, Euro broke the fib 61.8 and fell towards fib 100. Mid-term still short biased though there might be short-term rebound.

Markets Headed For a Double-Dip Recession: Pro

Stocks headed lower on Monday, continuing almost a month of losses. Is this a correction—and if so, how long will it last? Alan Lancz, president of Alan B. Lancz & Associates, and Ronald Carson, founder and chief executive of Carson Wealth Management Group, shared their market outlooks.

“I see a lot of downside in the market,” Carson told CNBC.

“This process of just hoping things are going to go up hasn’t worked for a decade and we’re quite confident that it’s not going to work for another decade.”

Carson said he sees the S&P dropping near 500 to 700 and “could get even lower.”

“I think we’re going to have a double-dip recession—this time next year, we’re going to be in a recession,” he said. “Housing is going to lead the way.” Read more

forex -eurousd strongly downward biased if break fib 61.8

Euro failed to make higher high and broke its upward channel. Strongly downward biased if break fib 61.8%. Shot if break fib 61.8%.

Forex-Eurousd retraces from low.

As stated earlier, Euro is grossly oversold and likely will retrace from downward movement, thus Euro retraced from low.

Wall Street sinks on euro-zone fears, reform angst

Leah Schnurr

NEW YORK

Thu May 20, 2010 6:23pm EDT

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Business Update: A list of worries

12:32pm EDT

(Reuters) - U.S. stocks sank nearly 4 percent on Thursday on growing fears the euro zone's efforts to tackle its sovereign debt crisis will fall short, jeopardizing the global economic recovery.

Selling picked up speed late in the day and indexes closed around their session lows after the U.S. Senate voted to end debate on the sweeping overhaul of financial regulation, allowing a final vote on the bill later on Thursday or Friday.

Read more

Stocks to Tumble Another 20%, Cash the Safest Place: Roubini

Stocks are likely to continue their aggressive decline and shed another 20 percent in value as the world economy weakens, economist Nouriel Roubini told CNBC.

Photo: Oliver Quillia for CNBC Nouriel Roubini

As the market slides into correction territory, Roubini said weakness in euro zone countries and a slowdown in the US and other developed countries will make things even more difficult for investors in the months ahead.

"There are some parts of the global economy that are now at the risk of a double-dip recession," said Roubini, head of Roubini Global Economics. "From here on I see things getting worse." Read more

U.S. Economy: Leading Indicators Drop in Sign Recovery to Cool

By Bob Willis

May 20 (Bloomberg) -- The index of U.S. leading economic indicators unexpectedly declined in April, a sign the economic expansion may cool in the second half of the year.

The 0.1 percent decrease in the New York-based Conference Board’s measure of the outlook for three to six months marked the first drop in a year and followed a revised 1.3 percent gain in March. Other reports showed more Americans filed for jobless benefits and manufacturing in the Philadelphia region expanded.

The initial factory-induced rebound from the worst recession since the 1930s, which is broadening to include advances in consumer spending and service industries, still faces hurdles. A slump in building permits, little letup in firings and retreating stock prices highlight risks to the strength of the recovery as concern over the European debt crisis mounts.

“It is unlikely that the U.S. economy can shrug off the troubling developments in the euro zone,” said John Herrmann, senior macro strategist at State Street Global Markets in Boston, who correctly forecast the drop. “The manufacturing rebound may be cooling a little bit from the torrid pace we’ve seen. There may also be disappointments on the retail side.” Read more

Stocks Threatening To Breakdown?

By: Lee Brodie
Producer

Both the Dow [.DJIA 10444.37 -66.58 (-0.63%) ] and S&P[.SPX 1115.05 -5.75 (-0.51%) ] continued their march lower Wednesday, again dragged down by fears that the crisis in Europe could quickly spread.

Germany's unilateral action to ban specific trades on some stocks and bonds sparked a fresh wave of selling with investors taking the move as a sign the European Union was not, in fact, unified.

"It's become increasingly clear that these are still separate countries with their own political agendas," says Kim Caughey of Fort Pitt Capital Group in a Reuters interview.

What must you know to trade this market?

S&P 500 INDEX (.SPX) 1115.05 -5.75 (-0.51%%) INDEX

Strategy Session with the Fast Money traders

The S&P found support around 1100, explains Pete Najarian, and it happened when the price of oil [CLC1 71.02 1.15 (+1.65%) ] turned higher. I liked that we rallied off the low. I wouldn’t say it makes me bullish but I found the action impressive.

My sources tell me institutions are taking risk off, Kaminksy adds. And it will stay that way at least through the summer. They feel that this isn’t the end of the crisis in Europe, it’s the beginning. Read more

Markets to Rise 11-14% by Year-End: Equity Analyst

“We’re going to have to deal with a lower rate of global growth, particularly out of Europe, but I think it does benefit the U.S.,” he said. “We are in a little bit of a better shape and fantastic earnings in [America].”

In the meantime, Caughey forecasts a 11 to 14 percent increase in the markets by year-end.

“Because we had problems in 2008 and 2009, our corporations are lean and mean and they are ready for a lower growth environment,” she said. “This year is showing that these companies can still come up with earnings and that’s what we’re looking at.” Read more

Sell it All, Risk of 'Major Crash': Dow Theory’s Russell

he author of the closely-watched Dow Theory Letters newsletter warned investors to get out of US stocks now in a report published Tuesday.

Richard Russell wrote that there is a risk of a “major crash” if the Dow Jones Industrial Average falls below the May 7 closing price of 10,380.43, according to several media reports.

"If I read the stock market correctly, it's telling me that there is a surprise ahead," Russell wrote. "And that surprise will be a reversal to the downside for the economy, plus a collection of other troubles ahead."

"Do your friends a favor. Tell them to “batten down the hatches” because there’s a hard rain coming," Russell warned. Read more

Forex-Eurusd Bearish but grossly oversold

Euro has broken the double bottom -that is a very bearish sign. The monthly chart indicates that it has broken the 200 MA thus establishing that the Bear is firmly in charge. However, the market is grossly oversold. So to place new short orders would be highly risky. Better to wait for retracement from the downside and continue with short orders.

Euro Falls to Lowest Since 2006, German Ban Spurs Risk Aversion

May 19 (Bloomberg) -- The euro weakened for a second day to the lowest level in four years as Germany’s ban on some speculative sales to halt a slump in asset prices triggered concern Europe’s sovereign-debt crisis will worsen.

The euro slid to its least since April 2006 after Germany prohibited naked short-selling and speculating on European government bonds with credit-default swaps and the Bank of Italy allowed lenders to exclude losses on government debt. New Zealand’s dollar dropped a fourth day as central bank Governor Alan Bollard said a gradual currency depreciation was desirable.

“If you don’t feel like you can sell bonds and equities in Europe, you’re left with selling the euro to express a negative view,” said Greg Gibbs, a foreign-exchange strategist at Royal Bank of Scotland Group Plc in Sydney. The German ban “creates a view that the authorities sense bigger problems than what may appear on the surface, creating more nervousness and fear.” Read more

March 2009 Lows Will Be Tested: Strategist

The stock markets’ March 2009 lows could be tested and even broken as sovereign debt continues to grow in Europe and stimulus measures wane, Philippe Gijsels, head of research at BNP Paribas Fortis global markets, told CNBC.com Tuesday.

When this stimulus is taken out of the system, we will see the emperor has no clothes, Gijsels said.

“As stimulus is gradually taken off and replaced by higher taxes the economy will slow and economic and corporate figures will start to disappoint.” he said. “This means that the mother of all bear-market rallies is over and bears now have a good shot at the March 2009 lows which will possibly even be broken.” Read more

Europe’s Debt Crisis Is Casting a Shadow Over China

The pain of the European debt crisis is spreading, with the plummeting euro making Chinese companies less competitive in Europe, their largest market, and complicating any move to break the Chinese currency’s peg to the dollar.

Chinese policy makers reached a consensus last month about breaking the dollar peg. But allowing the renminbi, which is also known as the yuan, to rise against the dollar now would mean a further increase in the renminbi’s level against the euro, creating even more problems for Chinese exporters to Europe

The steep rise of the renminbi prompted a Commerce Ministry official in Beijing to warn Monday that China’s exports could be threatened. The official’s comments, the most explicit yet on the implications for China of Europe’s recent financial difficulties, suggest that even the world's fastest-growing major economy, and increasingly the engine of global growth, is not immune to the crisis that started in Greece and threatens to spread across much of Europe. Read more

Why Dow 5000 Is Still 'Very Likely': Strategist

Last week, David Hefty, chief executive of Cornerstone Wealth Management, warned investors of a sudden market “freefall,” sending the Dow below 5,000. But James Hardesty, president, market strategist and chief economist at Hardesty Capital Management said there is still “much strength” in the economy and expects to end the year higher. They returned to CNBC Monday to share their insights.

“The Dow 5,000 piece is very likely—that’s not even the extreme low,” Hefty told CNBC. “It only takes a few hedge funds to get that margin call."

"When they start to sell—and the fact that everyone’s on pins and needles—that’s where the freefall starts to take place, like oil back in 2008," he said.

"When you look at the fact that we have $17 trillion of leverage inside the financial system and when you look at debt around the world, our financial system has more debt than anything else." Read more