Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
2Activity
0 of .
Results for:
No results containing your search query
P. 1
The Swagger is Back on Wall Street!-Outlook for Stock Markets-VRK100-19102009

The Swagger is Back on Wall Street!-Outlook for Stock Markets-VRK100-19102009

Ratings: (0)|Views: 55|Likes:
The article authored by Rama Krishna Vadlamudi, BKC, MUMBAI analyses the world financial markets. The world’s financial markets are on a sweet pot, except the value of US dollar, which has been on the back foot for quite some time now. Though the earnings from the US have, so far, been a mixed bag, for the third quarter; investors have been quite sanguine about the direction of stock markets the world over. As a result, all the major stock indices, including the Dow, FTSE 100, India’s Sensex, DAX, Nikkei 225 and Hang Seng have all been pushing to their one-year high levels. This piece of article analyses the various issues involved here and the outlook for world markets in a brief and lucid manner.

As depicted in the article, the important first results of American companies are a mixed bag. While Bank of America has made a net loss of USD 2.2 billion for the third quarter of this year, Citigroup made a modest profit of USD 100 million. On the contrary, Goldman Sachs, JP Morgan and Google have surprised the markets with their better-than-expected earnings and net income for the third quarter. Tech kingpins, Intel and IBM have surpassed Wall Street’s estimates. As a result, the Dow has reacted extremely positively to the earnings/net income and the Dow has tested 10,000 and it reached its yearly high of 10,100 on Monday close.

One common thread that runs through these results is this: Banks have shown resurgent profits, not due to any increase in their core businesses, but as a result of strong showing in their investment desks, led by rallies in the commodities and stock prices the world over. Banks that relied more on consumer finance have suffered with severe write offs being effected by them as shown below:
The article authored by Rama Krishna Vadlamudi, BKC, MUMBAI analyses the world financial markets. The world’s financial markets are on a sweet pot, except the value of US dollar, which has been on the back foot for quite some time now. Though the earnings from the US have, so far, been a mixed bag, for the third quarter; investors have been quite sanguine about the direction of stock markets the world over. As a result, all the major stock indices, including the Dow, FTSE 100, India’s Sensex, DAX, Nikkei 225 and Hang Seng have all been pushing to their one-year high levels. This piece of article analyses the various issues involved here and the outlook for world markets in a brief and lucid manner.

As depicted in the article, the important first results of American companies are a mixed bag. While Bank of America has made a net loss of USD 2.2 billion for the third quarter of this year, Citigroup made a modest profit of USD 100 million. On the contrary, Goldman Sachs, JP Morgan and Google have surprised the markets with their better-than-expected earnings and net income for the third quarter. Tech kingpins, Intel and IBM have surpassed Wall Street’s estimates. As a result, the Dow has reacted extremely positively to the earnings/net income and the Dow has tested 10,000 and it reached its yearly high of 10,100 on Monday close.

One common thread that runs through these results is this: Banks have shown resurgent profits, not due to any increase in their core businesses, but as a result of strong showing in their investment desks, led by rallies in the commodities and stock prices the world over. Banks that relied more on consumer finance have suffered with severe write offs being effected by them as shown below:

More info:

Published by: RamaKrishna Vadlamudi on Oct 20, 2009
Copyright:Attribution Non-commercial No-derivs

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

05/21/2010

pdf

text

original

 
 
By Rama Krishna Vadlamudi, MUMBAI 
October 19 
th 
, 2009 
 
The world’s financial markets are on a sweet pot, except the value of US dollar,which has been on the back foot for quite some time now. Though the earnings from the US have, so far, been a mixed bag, for the third quarter; investors have been quite sanguine about the direction of stock markets the world over. As a result, all the major stock indices, including the Dow, FTSE 100, India’s Sensex,DAX, Nikkei 225 and Hang Seng have all been pushing to their one-year high levels. This piece of article analyses the various issues involved here and the outlook for world markets in a brief and lucid manner.
THIRD QUARTER PROFITS ARE A MIXED BAG 
Sept 2009 Quarterly profits in USD million(2,200)1013,2003,6002,5001,6401,900-3000-2000-100001000200030004000Bank ofAmericaCitigroupGoldman SachsJP MorganGeneral ElectricGoogle Intel
   U   S   D    m   i   l   l   i   o   n
 
Rama Krishna Vadlamudi, BKC, MUMBAI October 19 
th 
, 2009 Page 2 of 8 
As depicted above, the important first results of American companies are a mixedbag. While Bank of America has made a net loss of USD 2.2 billion for the thirdquarter of this year, Citigroup made a modest profit of USD 100 million. On thecontrary, Goldman Sachs, JP Morgan and Google have surprised the marketswith their better-than-expected earnings and net income for the third quarter.Tech kingpins, Intel and IBM have surpassed Wall Street’s estimates. As a result,the Dow has reacted extremely positively to the earnings/net income and theDow has tested 10,000 and it reached its yearly high of 10,100 on Monday close.One common thread that runs through these results is this: Banks have shownresurgent profits, not due to any increase in their core businesses, but as a resultof strong showing in their investment desks, led by rallies in the commodities andstock prices the world over. Banks that relied more on consumer finance havesuffered with severe write offs being effected by them as shown below:
Bank of America: 
It reported a loss of USD 2.2 billion for the quarter. The loss is after dividends arepaid to preference shareholders. It set aside USD 11.7 billion for credit lossesduring this quarter and made losses in credit cards, mortgages and insurancebiz; while the global markets division, which includes ex-Merrill Lynch business,made good profits.
Citigroup: 
It is much more exposed to consumer loans and naturally it could show a profit ofonly USD 100 million. It has written off USD 8 billion of credit losses in thirdquarter.
Goldman Sachs: 
 
Investment Banking is the biggest contributor to profits.
 JP Morgan: 
 
Strong performance in investment banking division.
 General Electric: 
Net profit fell by 44% y-o-y while revenues were down 20%. The conglomerate isseen as a barometer of the US economy and is the only co to have continued inthe Dow Jones for more than a century. It's a microcosm of the S&P 500 INDEX.
Google: 
Profits are up 27% y-o-y. Google has no competition as of now. The internet adindustry is beginning to show signs of strength and Google is the biggestbeneficiary of that.
Intel: 
Profit is down 5% year on year.
Apple: 
Latest media reports suggest that Apple has made good profits at USD1.7 billion, nibbling away at market share of giants, like, Microsoft and Nokia withits Mac computers and smarter iPhones. Moreover, Steve Jobs is back at Apple.
 
Rama Krishna Vadlamudi, BKC, MUMBAI October 19 
th 
, 2009 Page 3 of 8 
THE DOW BALLOONED ABOVE 10,000 
Powered by some good corporate results as shown above, for the first time in ayear, the Dow (DJIA 30) has pushed above 10,000 last week and has closed atad below 10,100 Monday.
The Dow has ballooned above10,000 last week for the first time ina year and is now quoting around10,100 on Monday close. It isastounding to note that the Dowhas touched 10,000 for the firsttime in its history more than 10years back in March 1999-whichmeans the Dow has not shown anyprogress in the last 10 years, whichis quite a revelation to manyinvestors. Its life-time high wasaround 14,100 achieved on October9th, 2007. Its lowest this year wasaround 6,450 on March 9
th
- whichmeans from its nadir of March2009, the Dow gained more than 55per cent.
This week is going to be an important week for the US markets as more than130 companies, which are part of the broader S&P 500 index, will reportresults during this week, which include 13 Dow components. The standoutsare: American Express, 3M, Microsoft, Merck, Pfizer, Coca-Cola, Yahoo,Wells Fargo, Amazon.com and eBay.
ASIAN & EUROPEAN MARKETS TOO ARE ON A ROLL
Stocks across the globe, right from Australia, Asia Pacific, South Asia to Europehave been on a roll on Monday with optimism abounding about the so-called‘Road to Recovery’ in world’s financial markets. The Hang Seng is hoveringaround 22,200; Sensex at more than 17,300 (Mumbai had a trade holiday onMonday); the FTSE 100 at close to 5,300; France’s CAC at 3,900 and Germany’sDAX at around 5,850. The world is awash with liquidity and the stock markets arecurrently reflecting that optimism. Japan’s Nikkei 225 is also on a roll due to goodearnings from exporters, such as, Honda Motors, Mitsubishi UFJ Financials andother banks.

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->