In New York Tuesday, the Dow Jones Industrial Average fell 176.58-point loss, off 2%, at 8693.96. All 30 components fell.
General Motors dropped 13.1% to a 1943 low - - see story link in box below.
The S&P 500 fell 2.2%; the Nasdaq Composite fell 2.2%.
Shopping mall operator General Growth Properties fell 66.4% after the Chicago company warned it could file for bankruptcy protection if it doesn't raise more capital to pay down its debt.
Bloomberg says today that the US downturn will be the longest in three decades, and the drought in consumer spending may be the worst ever, according to economists surveyed by Bloomberg News.
The implosion of credit markets last month will cause the economy to shrink at a 3 percent annual rate in the fourth quarter and decline at a 1.5 percent pace in the first three months of 2009, according to the median estimate of 59 economists surveyed Nov. 3 to Nov. 11. Following last quarter's 0.3 percent drop, the slump would be the longest since 1974-75.
``The economy fell off a cliff in October,''said Richard Berner, co-head of global economics at Morgan Stanley in New York. ``We had a huge financial shock that intensified the credit crunch and triggered a sharp downturn.''
In Asia, the MSCI Asia Pacific Index fell 1.5%.
The Nikkei 225 fell 1.3%; China's CSI 300 rose 1.15% and India's Sensex 30 fell 3.47%.
Bloomberg reports today that China's retail sales rose 22%, close to the fastest pace in nine years, signaling that domestic demand may help the fourth-biggest economy withstand a looming global recession.
Sales climbed to 1.008 trillion yuan ($148 billion) in October, the statistics bureau said today, after gaining 23.2% in September from a year earlier.
Asia-Pacific - benchmarks
Dutch banking group ING Groep NV, which got a €10 billion capital injection from the Netherlands government last month, said writedowns amounted to €1.51 billion in the third quarter and may extend through year end.
The third-quarter loss was €478 million or 22 cents a share, it said today in a statement.
ING shares rose over 2% in Amsterdam.
Full results
In Europe Wednesday, the Dow Jones 600 is up 1.14% and most markets are up.
In Dublin, the ISEQ is up 0.5%.
Irish Share Prices
Euribor Rates
AIB Daily Report
Bank of Ireland Daily Report
Dublin based Financial Spread Trading company Delta Index today launched its Contracts for Difference (CFDs) product for investors seeking to take long or short positions on the financial markets.
The company’s CFD portfolio complements its established financial spread betting services by offering the most competitively priced range of CFD products in the Irish market. The rollout will initially focus on the Irish, UK and German markets which have begun to experience substantial growth following EU-wide regulation of the sector. Additional countries across the EU will be targeted in the coming months.
Commenting on the launch, Chris Curran, Head of International Development, Delta Index, states, “Irish stamp duty of 1.0% on all share purchases renders trading in traditional stocks prohibitively expensive and ineffective in terms of costs incurred when combined with brokers fees. This barrier is removed with CFDs and financial spread-betting, which are exempt from stamp duty in Ireland.”
“We continue to see record levels of trading as clients take advantage of recent market conditions and seeking to maximise gains from current levels of volatility and investors new and experienced alike are increasingly turning to alternative financial instruments such as Contracts for Difference.”
A key enabler of Delta Index’s EU expansion is the implementation into Irish law in September of key aspects of MiFID (Market in Financial Instruments Directive) – a move which allows the company to passport its online financial products to other EU markets while being regulated solely by the Irish Financial Regulator. Since regulation, a huge upsurge in the take-up of CFDs trading has materialised throughout the EU. The German market in particular, with approximately 5,000–10,000 active traders, is seen as a key area for Delta Index given its impressive recent growth rates of 30% per annum.
The other key enabler is Delta Index’s investment in a proprietary online trading platform to provide a multilingual and multicurrency interface for clients across Europe. “On foot of a recent €3m investment in a intuitive, easy-to-use trading platform, our launch today is part of a wider rollout of contracts for difference throughout the EU. We expect CFDs and financial spread betting to experience substantial growth over the coming years, particularly in Ireland as more and more people look to take control of their own financial destiny and embrace alternative means of investment,” adds Curran.
Goodbody Stockbrokers economist Deirdre Ryan said today:"While equity markets have continued to fret about the real economy over recent days, modest improvements continue to be made in credit markets. Indeed, we are now seeing indicators such as the TED spread (which measures the difference between 3-month US Libor and 3-month treasuries) retreat steadily back towards levels which prevailed before the Lehman’s collapse in mid September. The day before Lehman’s faltered the TED spread stood at 135bps, before rising to a peak of 463bps over subsequent weeks. However, continued extensive measures to improve liquidity has seen risk aversion retreat from such stressed levels, and over the past week the TED spread has fallen by almost 40bps alone, currently standing at 174bps. While still elevated in an historical context, the improvements are nevertheless, very much welcomed.
The overnight and short term money markets have also continued to thaw and with further cuts in base interest rates in store in the near term, this will aid this process. Nevertheless, as mentioned above, it is concerns over the real economy which remains paramount at the current time. In this light, the main focus of today will be the Bank of England’s Quarterly Inflation Report, (to be published this morning at 9.30). This will outline updated projections for growth and inflation and is set to illustrate a sharply deteriorating UK economy. Against this backdrop, the improvements made in credit markets may continue to go unnoticed."
Davy economist Rossa White commented today:"Today sees the latest labour market data in the UK. It follows another poor run of data from the retail trade and the housing market. Yet the key variable is the financial and business service sector. We expect a shake-out in employment in this area in the next few years as debt levels are reduced by financial firms and households. The unemployment rate, currently at 5.8%, will be closer to 8% by end-2009.
It is hard to overstate the UK economy's reliance on financial and business services for growth in recent years. Note that 55% of total UK employment growth from the bottom of the last cycle (Q1 2003) until the second quarter of this year was accounted for by financial and business services. Much of that may be given back in the next few years.
The bright spot for the UK is currency weakness. This will help exporters, but the problem is that manufacturing amounts to only one-tenth of the UK economy today. In addition, service exports are less sensitive to the movement of sterling. So it is hard to see where employment gains are going to materialise in the short term. Other service sectors will be hurt by tighter credit availability, while the public sector is constrained by the largesse of recent years and slowing tax revenue."
Currencies
The euro is trading at $1.2538 and at £0.8164.
The fall in the value of the pound follows the Bank of England's cut in its benchmark rate on Thursday to 3% - - the lowest since 1955.
For live currency updates, check the right-hand column of the Finfacts home page.
The US dollar fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.
Commodities
Crude oil for December delivery is currently trading on the New York Mercantile Exchange (Nymex) at $58.04 per barrel down $1.29 from Tuesday's close. In London, Brent for December delivery is trading on the International Commodities Exchange at $55.26 down 45 cents.
Gold spot price
Gold is trading at $736.10 up $4.70 from Tuesday's spot price close in New York.
