Global Stock Rally Slows, Doubts On Euro Debt

Reuters ^ | 5-10-2010 | Masayuki Kitano

[blam]

RPT-GLOBAL MARKETS-Global Stock Rally Slows, Doubts On Euro Debt

By Masayuki Kitano
Mon May 10, 2010 11:25pm EDT

* Global stocks rally slows sharply on Tuesday

* Asian shares take breather after biggest 1-day rise in a yr

* Euro dips, trims much of gains made on EU's rescue package

* Some doubts about how some euro countries will cut deficits

TOKYO, May 11 (Reuters) - A massive relief rally in world stocks on news of a $1 trillion deal to resolve Europe's debt crisis slowed down on Tuesday in Asia on nagging doubts about how Greece and other debt-laden euro zone countries will reduce their budget deficits.

The euro, which had initially surged on the news of the package put together by EU finance ministers, central bankers and the IMF, was slightly weaker on Tuesday and well off its Monday high.

The European rescue package, together with a pledge from the European Central Bank to buy government bonds, helped ease worries about the risk of contagion from Greece's debt crisis.

In response, markets soared worldwide on Monday. Stocks in fiscally weak Greece, Spain and Portugal jumped by double digits and the risk premiums on their debt tumbled against benchmark German bunds. Wall Street racked up its biggest one-day gain in over a year.

But longer-term concerns remained over whether Greece and some other euro zone countries with large fiscal deficits will be able to smoothly carry out fiscal austerity measures, market players said.

Those worries capped the upside for Asian equities.

[snip]

[blam]

The Asian markets are mostly down. Click here to see the results.

[The Magical Mischief Tour]

Damn!

That was a quick honeymoon...

[blam]

Market Gurus Advise Caution

[advance_copy]

The people who run the financial system are leftists, and they are incompetent. But I repeat myself.

[ProtectOurFreedom]

“Some doubts about how some euro countries will cut deficits” — Huh? I thought pumping in a trillion was going to solve all that. Are the utopians actually going to give up on their dream of living on free government money forever? Joining the workforce at 30 and retiring at 50 with government paid vacations?

[bray]

You mean the problem still exist after we give them a Trillion?? Who would have thunk?

Pray for America

[joinedafterattack]

Time to print another wheelbarrow full of money.

These countries, and out country, will NEVER stop spending.

Get enough gold on hand to bribe the border guards I say!

[blam]

Chinese Inflation Just Blew Away Forecasts And You Don't Want To Extend This Trend

Vincent Fernando, CFA
May. 11, 2010, 1:31 AM

China's April inflation blew past expectations and accelerated from March. Consumer prices rose 2.8% year over year, which surpassed economists' expectations of 2.7% according to the Wall Street Journal. April's inflation rate was higher than the 2.4% increase in March, and as shown below is the highest inflation rate since the global recovery began in early 2009.

Property prices for 70 major Chinese cities also rose 12.8% on average, year over year. This rise was faster than March's 11.7% increase according to China's National Bureau of Statistics.

It could be that recent efforts to cool China's property market will temper future inflation readings, but the accelerating uptrend certainly deserves attention and makes a Chinese rate hike and/or yuan adjustment more likely to come sooner rather than later. You definitely don't want to see China extend the current inflation trend shown above.

(The chart above was built with data from Trading Economics)

[A Navy Vet]

Thanks for all the economical/financial info. Please put me on your list.

Personally, I believe we are headed to a double-dip by end year or early 2011. Our and and other governments have done all the WRONG things to stop such another dip. While I don't believe we will see DOW 6500 again anytime soon, I am mostly in cash, awaiting a DOW of 9500 or 8500 and all the opportunities it will provide.

With all the residential and commercial mortgages yet to fail, financials (banks failing every month), job losses, and world economic plight, I can't help but believe that Wall Street is being manipulated somehow. I'm not smart enough to figure out how, but I've never seen such a disconnect between Wall Street and Main Street.

I've been in the Market since 1995 and have never seen ALL sectors/equities/commodities move in tandem like it does now. Used to be certain sectors led the way in or out of a recession that made sense. I am at a total loss now and that's why I'm staying in cash. Got clue why this happening?

[struggle]

They make the majority dependent on the government.

They crash the market.

They brand the “rich” that crashed the market as “un-American.”

[bruinbirdman]

EUro down to $1.2722

yitbos

[bruinbirdman]

"With all the residential and commercial mortgages yet to fail"

With Fannie controling the residential foreclosures, why do I have the feeling Barney the Flank and his cohorts are just letting folks occupy sans mortgage payments?

In Las Vegas the retail hawkers are saying sales are outpacing new units on the market. Las Vegas!!!We are sitting on a 5 year inventory of vacant houses. But they are not all for sale!!

yitbos

[expat_panama]

we are headed to a double-dip

Nobody knows what's going to happen but what we can see are patterns, and right now average real family incomes have been pretty much flat for a few years --no sign of the usual long term growth. 

The last time that happened was in '80, and it got us a momentary uptick in jobs that reversed to a double dip.  Right now is more like '80 than '83 (when income growth finally continued) for another reason --in '80 the president was a moron.

(banks failing every month), job losses, and world economic plight, I can't help but believe that Wall Street is being manipulated somehow.

Employment/world econ problems we got.  Bank failures and market manipulation we don't --OK everyone says we do but it's just another democrat lie to justify more Marxist takeovers.

certain sectors led the way in or out of a recession that made sense. I am at a total loss now

IBD often takes the view that sometimes we got market leaders and sometimes we don't.  Times like now (when we don't) those that are in cash (like you and I) do better.

[American Constitutionalist]

Yesterday the liberals, MSM tried to put a good face on the market rally of 400 points to try to fool the sheeple into thinking that Obama economics are working like the supposed recovery, but, this whole thing is built on a house of cards.

[American Constitutionalist]

" Got clue why this happening? "

It's because we are in deep DOO DOO from failed liberal polices.... and the world's economies can't sustain this kind of debt.