Stock Market News

There are many negative factors that are wreaking havoc on the U.S. economy and consumer. Gas and food prices are rising, consumer confidence is lowering, and poor employment reports and the housing crisis have all contributed to a weakening U.S. economy. Find out the specifics about these happenings, as well as how we can still profit in this environment.

This past week, the Chinese stock market made its biggest advance in over six years. The gain can be attributed to a move by the Chinese government to cut the stamp tax. Read on to learn about why the stamp tax is important, and what this means for Chinese investments overall.

We're in the middle of earnings season, so it should come as no surprise that the market's actions in recent weeks have been in response to company reports. In April, after a round of better-than-expected earnings, the domestic markets rallied, with the S&P 500 up 4.3% -- that's its best week since February.

Recently, we have received some dire news about the U.S. economy. Employment rates are down, and Federal Reserve Chairman Ben Bernanke even said for the first time that the U.S. may enter a recession. Because of these recent developmetns -- especially the fact that Bernanke, who has stayed relatively optimistic in recent months, is 'fessing up to his recession fears -- tells me that the U.S. economy is in trouble.

Asian stocks rose last week, completing their biggest weekly gain this year. But despite these gains this past week, the overall picture for first quarter is not as bright, as global financial woes are starting to take a toll on Asian economies. I want to take a deeper look into how the global economic crisis is affecting the markets in Asia.

It's not surprising that the American stock market is volatile right now given weak economic data and earnings reports. But, as you know, economic growth in China isn't slowing and many of China's leading companies have announced strong earnings recently.

The financial crisis in the United States came to a head this week, sending international and domestic markets reeling in early trading on Monday. The markets took a hit following the collapse of Bear Stearns and JP Morgan's buyout offer for the struggling financial company.

It has been quite a week on Wall Street -- investors have experienced whiplash from watching U.S. stocks sink to recent lows before bouncing dramatically yesterday after the Fed announced a recovery plan. Let's talk about the current economic picture in the United States, and what it all means for us as investors, as well as what's happening in Asian markets.

U.S. stocks tumbled again on Friday, the last day of February, marking the American stock market's fourth-straight monthly drop. The Dow plunged more than 300 points during the trading session after American International Group, the world's largest insurer, posted the biggest quarterly loss in its 89-year history.

In case you're not familiar with the term, stagflation is the painful combination of price inflation and a slowing economy that puts a real pinch on consumers. Today I want to discuss with you how what China is doing now affects the rise of stagflation around the globe.

Even though the United States has experienced a lot of economic turmoil over the past few months, I believe the economy remains resilient outside of the housing and financial services industries. Recent reports indicate that consumer spending has held up well. According to the economic data, though the spending growth is slowing down, firm employment levels at high-wage jobs are keeping higher-end American consumers active.

Stock markets around the world continue to bounce around within tight trading ranges. Here at home, the S&P 500 continues to trade in a 10% range between 1270 and 1400. The index ended today’s trading session at roughly 1360, which is somewhere near the middle of our expected range.

I want to talk about where the market is headed. I still expect the S&P 500 to trade in a 10% range between 1,270 and 1,400 for the next few months. After a run-up to the top of my expected trading range of 1,396 two weeks ago, stocks sold off hard last week.

In this environment of rising volatility and a range-bound market, it is important for investors to be more opportunistic to make money. In this type of choppy market condition, the optimum holding period for positions is shorter than most of us are accustomed to. However, it can be done, and it can be very profitable.

Sensing potential economic weakness, the Fed cut both the federal funds rate and the discount rate by 0.5%. The Fed cut more than the modest 0.25% that most investors were expecting. This puts the funds rate at an even 3.0% and the discount rate is down to 3.5%, marking the lowest interest rate level since 2005.

We certainly know that it's been a horrible week for the major U.S. markets, but stock markets elsewhere also took big hits this past week. Major global market indices such as Japan's Nikkei 225 Index, Hong Kong's Hang Seng Index, and U.K.'s FTSE 100 Index are all now sitting on double-digit losses for the year. Most of the pressure is coming from concerns of a U.S. recession.

We're only two weeks into 2008, and already the U.S. market is having a tough year. In fact, the S&P 500 experienced its worst first half of January since 1982. As of yesterday's close, the S&P 500 has fallen 6.0% this year so far, led by financials, technology and consumer companies. Tech companies have suffered the biggest blow -- taken as a group within the S&P 500, their shares have dropped more than 10%.

The final numbers are in, and 2007 was a tremendous year! But the New Year hasn't started out so well for the U.S. markets as the S&P 500 is down 5.2% as of yesterday's close. Downward pressure is coming from weak economic data and more housing/financial industry woes. Not helping matters was last Friday's U.S. employment report, which posted its smallest increase in more than four years for December as the housing downturn continued to take its toll.

I'd like to start the year by looking back at the 2007 stock market performance of some of the world's fastest-growing countries. China in particular had a terrific year because of continued economic strength, great corporate earnings and favorable demographics.

I hope that you had a wonderful holiday and are recharged and ready to get back to business -- I know I am. There are a few things I'd like to tell you about today before we get to the updates on our companies. We need to do a quick check on the U.S. economy to see what sort of a position we're entering 2008 from and then we need to cover some interesting developments in Asia.

There has been no holiday cheer on Wall Street this week -- U.S. stocks experienced the steepest weekly drop in a month. Some of the losses may have been due to the recent CPI announcement. The consumer price index jumped 0.8% in November, the most since September 2005.

Exactly two weeks ago, we talked about how I was expecting a stock market rally that would last anywhere from two to four weeks. Just as we discussed, the S&P 500 Index rallied nearly 6% over the last two weeks and then sharply reversed course yesterday, declining 2%.

Last week U.S. stocks posted their biggest weekly gain since March after Federal Reserve officials including Chairman Ben Bernanke signaled more interest rate cuts may be on the way. There's a growing consensus that Fed policy makers might cut the benchmark lending rate by as much as 0.5 point, rather than the widely expected 0.25 point, when they meet again on December 11.

There certainly hasn't been a dull moment in the markets lately. The global stock market sell-off continued through Monday. And in Monday's final hour of trading, a wave of panic selling sent the S&P 500 Index down to 1,407 -- about 0.5% below where the market started the year.