Overnight Market Movers Jan 26, 2010

While many eyes here in America are distracted by the ongoing political noise emanating from Washington, there are significant market moving developments with long-term implications happening overseas.

Let’s first look east to China and Japan. There are two major stories in this region:

1. Chinese banks are putting restrictions on new lending. This effective tightening of credit is a result of concerns that excessive speculative lending has created an asset bubble. The major Chinese stock index sunk to a three month low on this news. This development out of China has supported the greenback in a flight to safety.

2. Japan’s sovereign credit rating may be cut by S&P, as the rating agency believes that the ‘Land of the Rising Sun’ has limited flexibility to deal with its massive government debt load.

Moving westward, news out of the United Kingdom is good  . . . or is it?

3. The U.K. economy finally comes out of recession with a reading of a .1% increase in its 4th quarter GDP. Well, a positive is better than a negative but a reading of .1 is very disappointing when expectations were that the reading would come in at .4. Additionally, the growth was almost all driven by government assistance. U.K. Prime Minister Brown defined the economy as ‘fragile.’  I think he’s being generous.

Moving to the mainland United States, we witness blowout earnings by Apple (AAPL) with sales of the iPhone doubling. If only the overall economy were so lucky.

In Washington, Fed Chair Bernanke will likely be reconfirmed. President Obama will try to curry favor with his call for a spending freeze, albeit at exceptionally high levels. A Federal Reserve official offers that Congress is getting in the way of an economic recovery.

The more things change, the more they stay the same. That said, do not get complacent. There remain significant risks on our economic landscape and within our markets.

About Larry Doyle 522 Articles

Larry Doyle embarked on his Wall Street career in 1983 as a mortgage-backed securities trader for The First Boston Corporation. He was involved in the growth and development of the secondary mortgage market from its near infancy.

After close to 7 years at First Boston, Larry joined Bear Stearns in early 1990 as a mortgage trader. In 1993, Larry was named a Senior Managing Director at the firm. He left Bear to join Union Bank of Switzerland in late 1996 as Head of Mortgage Trading.

In 1998, after 15 years of trading and precipitated by Swiss Bank’s takeover of UBS, Larry moved from trading to sales as a senior salesperson at Bank of America. His move into sales led him to the role as National Sales Manager for Securitized Products at JP Morgan Chase in 2000. He was integrally involved in developing the department, hiring 40 salespeople, and generating $300 million in sales revenue. He left JP Morgan in 2006.

Throughout his career, Larry eagerly engaged clients and colleagues. He has mentored dozens of junior colleagues, recruited at a number of colleges and universities, and interviewed hundreds. He has also had extensive public speaking experience. Additionally, Larry served as Chair of the Mortgage Trading Committee for the Public Securities Association (PSA) in the mid-90s.

Larry graduated Cum Laude, Phi Beta Kappa in 1983 from the College of the Holy Cross.

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1 Comment on Overnight Market Movers Jan 26, 2010

  1. i rather the Chinese sunk a bit more
    leveling the playing field & maybe giving
    a chance for the usa to wake up its
    manufacturing industry.

    i am witnessing some rekindling
    of American manufacturing but its
    still a low tone buzz..

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