The market is extremely oversold right now; a rally wouldn’t surprise me. What would spark a rally? Well, everyone is expecting bad news this week, so if the news is less-bad-than-expected, that may cause shorts to cover their positions. And that, in turn, could spark a rally.
I think that rally should be sold. I have a story on Dow Jones MarketWatch today: Stock Doom and Gold Boom. It is similar to a piece I did for MoneyandMarkets.com two weeks ago; there have been new developments.
In other news …
Silver Beating Gold First Time Since 2006 as `Poor Man’s’ Currency Refuge Silver’s biggest discount to gold in 13 years has investors betting on the best annual return for silver since the Hunt brothers’ bid to corner the market in 1979.
Gold Rebounds From Biggest Drop on Haven Demand Gold climbed for the first time in six sessions in London as stock markets tumbled on speculation that economies are worsening, adding to the metal’s appeal as a store of value. Platinum also gained.
XX Sean’s note — gold’s rally faded and it is now flat. We’ll see where it ends the day.
Canada’s Economy Shrinks at 3.4 Percent Annualized Pace, Most Since 1991 Canada’s economy contracted at the fastest pace since 1991 in the fourth quarter, adding pressure on policy makers to cut the country’s benchmark lending rate to a record low tomorrow.
XX Sean’s note — so many analysts at the Phoenix Investment Conference were bullish on the Canadian dollar. I was a dissenting voice. I think this story on the slowing Canadian ecoomy helps my case, not theirs. On the other hand, the New York Times has a story on how Canadian banks are both well-run and solvent. The U.S. wishes it could say the same.
China’s Manufacturing Shrinks for 7th Month as Global Crisis Cuts Exports China’s manufacturing shrank for a seventh month in February as the global financial crisis cut exports and growth across Asia.
All Around the World, Trade Is Shrinking The world trading system, whose growth was deemed an inevitable part of globalization only a year ago, is now shrinking rapidly … The 17 percent drop for overall Chinese exports, while large, is still modest compared with the declines being felt by other developing economies. The three largest economies in South America — Argentina, Brazil and Chile — reported declines of 27 to 42 percent. Exports from Taiwan were off 46 percent, and those from Singapore fell by 41 percent.
QUOTE OF THE DAY …
From New York Magazine …
‘The top five U.K. banks have $10 trillion of assets and their GDP is only $2.13 trillion. The whole country could fall into the ocean. The top five U.S. banks represent only about 60 percent of GDP by comparison. The other thing is a survey that I just read about in the Times. Over six in ten Americans think that someone in their household will lose their job in the next year. That means six in ten people won’t buy anything other than basics. The economy comes to a full halt even worse than now.’
Ice Melting Even Faster in Antarctic 60 Nation Team Says Seas Could Rise 3 to 5 Feet by End of the Century
Making matters worse, scientists said, the ice shelves that hold the glaciers back from the sea also are weakening.
Econbrowser asks: How low can stock prices go, and how worried should you be? The comments on this one are particularly illuminating when it comes to the mood of investors. S&P 500 at the 200 level, anybody?
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