Their was a lot of turbulence on the markets this week. There was bad news about the economy and corporate news but the investors began also with bargain-hunting.
We are in interesting economic days now and you can see that on the markets. Rallies of this proportion you usually don’t see but the reason for these rallies are the markets, markets that lost 50 percent in 1 year is something you either don’t see.
For example the FTSE Eurofirst 300, they gained 1.1 per cent profit on Friday and only this week they gained 13.3 per cent. But also the FTSE Eurofirst 300 lost 50 per cent when you compare it with one year ago.
Their was a lot of bad news but this didn’t make a difference for the investors. They taught the bad news was already in the price per share. The volumes were also light because Thursday the Thanksgiving holiday started in the United States.
Let’s have an overview about the stocks now.
The solar market that was hit very hard by the crisis made a spectacular rebound. Renewable Energy and Q-Cells won 50 per cent, that is an unexpected rebound.
The technology sector did not so good after STMicroelectronics came with bad news. The investors were surprised and the shares increased. They forecast they will lose some money, the lost would be 13 per cent.
Shares in STM had a bad day Friday but when you compare it with the week results they won. 1 to 2 per cent. Infineon did a good job, they won 8 per cent this week.
Allianz sold Thursday Dresdner Bank division to Commerzbank, this helped to raise the share with 39.8 per cent. The deal was sealed for a long time because they were afraid about the threatens of this transaction. This deal is positive according to Allianz, they were never satisfied about the Dresdner Bank, but this deal is positive for Allianz.
The financial shares did a good job, Commerzbank rose 32.5 per cent this week, Deutsche bank won 48.8 per cent.
The future of the motor industry is dark after Renault halted his productions in Moscow.
I think this week was satisfied for the markets but there is a lot of uncertainty on the markets.
There are a lot of investors who think on short term. They hope the shares that lost a lot one day ago that they will win a lot today. After 1 day they sell their shares.
People with a lot of money influence the markets like this. They buy a lot of shares on Monday for example so the volume gain, and the price also decrease on Tuesday. After Tuesday they just sell their shares, the volume increased and the price per share also.
This is not a good technique for the markets, the markets need investors who think on long term. Not just on 1 day or 2. This will restore the confidence and when the confidence is restored, the markets can recover.
Source: http://www.ft.com/cms/s/0/4ca4fb4a-bd36-11dd-bba1-0000779fd18c.html
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I agree with Wouter on what he says about short-selling. This is not the technique we need at the moment. The markets need people who are willing to invest on the long term, who have confidence!
We say it every week, but trust is a very important item for our economy.
I sincerely hope that the markets recover soon, otherwise I think that the recession we now have, will turn into a depression. Especially if the stocks keep decreasing.
I also agree with Wouter and Tim when they say that short-selling isn't what the market needs right now. It is a very difficult situation and it will be hard to get out of this vicious circle. Because of the recession, people cut back on their investements and the value of shares decline. But people who still have money to invest are having no confidence in the markets. It will be very hard to find a solution for this problem.
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