US markets witness worst weekly loss in 5 months, snaps seven straight months of gains. US markets slide 2.5% on Friday (biggest 1 day % drop since July); gain 0.8% on Monday but slips from day’s high. Dow Jones ended down 250 points on Friday, gained 77 points on Monday.
US financials hit on Friday after an analyst comment that Citigroup may have to take another $ 10 bn in write-downs & likely CIT bankruptcy filing in next few days.
Dow Jones end up 77 points at 9789 on Monday; slips 70 points from days high of 9858. NASDAQ up 4 points at 2049 on Monday; slips 20 points from days high of 2069. S&P 500 up 6.7 points at 1043 on Monday; slips 10 points from days high of 1052.
Asian markets open mixed; Shanghai up 0.9%, Straits Times p 0.2%, Taiwan, Kospi trade flat, Hang Seng down 0.1%. Japanese stock markets closed today on account of national holiday. Europe: CAC up 0.9%, DAX up 0.3%, FTSE up 1.2%. CBOE VIX ends down 3% at 29.78; surged 25% on Friday.
CBOE gained 39% last week, up 21% for Oct, down 23% YTD. CBOE VIX witnessed its biggest one-day gain since the crisis began in October 2008 on Friday.
Global M&S: CIT Group 65% on Monday, was down 25% on Friday after the 101-year-old commercial lender filed for bankruptcy. Ford Motor up 8.3%; posted a quarterly profit & increased its 2011 outlook to “solidly profitable” from break-even. Indian ADRs; Tata Comm up 6.5%, ICICI Bank up 4.3%, DRL up 5.5%.
Global Opinion: Jon Greenlee, the associate director of the Fed’s Division of Banking Supervision and Regulation, said U.S. banks are at risk for sizable new loan losses, particularly on commercial property, and some banks may not have enough capital to fully cushion against setbacks
Commodities: Reuters CRB up 1.2% on Monday, was down 2.1% on Friday. Crude off 2 week lows, up 1.5% to $ 78.13; down 4.4% last week. Gold up 1.3% at $ 1054, 1 week highs. Copper up 1.1% to $ 6550.
Currencies: USD appreciates 80 bps Vs Euro at 1.4729. Yen appreciates 1.5% Vs USD at 89.91. Korean Won up 1.8% Vs USD.
Global Economic News: US ISM manufacturing index at 55.7 in Oct, 3rd straight month of growth and the highest since April 2006. US Pending-home sales rose 6.1% in Sep, highest level in nearly three years. US consumer sentiment slipped to 70.6 in October from 73.5 in September. US construction spending in September up 0.8%. China’s manufacturing sector expanded at its fastest pace in 18 months in October. Factory activity in the euro zone expanded for the first time in 17 months.
Data To Watch
Two-day Fed meeting begins
US Auto makers report October sales
US factory orders
Earnings from UBS, MasterCard, Viacom and Kraft
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