Tuesday marked a reversal of fortune for global stock markets as investors adopted a more positive view of the prospects for the banking sector and cast aside concerns about the economy.
The movements of the major US indices over the past three days tell the story of the nascent rally: Dow Jones Industrial Index (+8.7%), S&P 500 Index (+11.0%), Nasdaq Composite Index (+12.4%) and Russell 2000 Index (+13.7%). A positive close by the end of trading today [Friday] will record only the second up-week out of 10 in 2009.
On the video front, footage was produced debating whether markets were witnessing A bottom or THE bottom and also the usual dosage of the dour outlook for economic growth and speculation about the “next penny” to drop.
Also included in this week’s compilation is a mega interview with celebrity stock endorser Warren Buffett, as well as a no-holds-barred face-to-face encounter between Jon Stewart and Jim Cramer (in three parts at the end of the post).
Bloomberg: Marc Faber says government actions will boost stocks “Government spending will spur gains in the Standard & Poor’s 500 Index after it fell 56% from an October 2007 record, investor Marc Faber, the publisher of the Gloom, Boom & Doom report, said. ‘Equities could rally between here and the end of April,’ Faber said in an interview with Bloomberg Television. ‘The government’s efforts will fail to boost economic activity. They can boost stocks. Stocks have adjusted meaningfully.'”
John Authers (Financial Times): China and the markets “Should US or European stocks have sold off on the Chinese news [of poor exports]? Not necessarily. By this week, the S&P 500 had priced in much future bad news, says Authers.”
CBS News: Your bank has failed – what happens next? “What would happen if your local bank failed? Scott Pelley and ‘60 Minutes’ were given extraordinary access, as the Federal Deposit Insurance Corporation moves in to take over a failed bank in Chicago.”
YouTube: Art Bell & Michael Panzner talking about the economic downturn “Art Bell was joined by Wall Street veteran Michael Panzner, who discussed the dire economic circumstances in America and around the globe. According to Panzner, the US is not in a typical recession. Instead, he believes the crisis more closely resembles a depression, in which we can expect an extended period of economic contraction accompanied by deflation.”
Bloomberg: Chang sees civil unrest spreading from global recession “Ha-Joon Chang, a professor at the University of Cambridge, and Frank Holmes, chief executive officer of US Global Investors, talk with Bloomberg’s Pimm Fox about the outlook for the global economic crisis. Chang and Holmes also discuss the outlook for trade, the credit markets and investment strategy.”
CNBC: Warren Buffett – US economy has fallen off a cliff “Billionaire investor Warren Buffett, says the Fed’s actions have prevented things from getting worse. The Berkshire Hathaway chairman/CEO says that it takes longer for Americans to regain confidence and only five minutes to become fearful, with CNBC’s Becky Quick.”
Financial Times: Bernanke says crisis could end soon “Federal Reserve Chairman Ben Bernanke told the Council on Foreign Relations that if the banking system can be stabilized, the economic recession – which began in December of 2007 – could come to a close within the next three economic quarters.”
Bloomberg: Feldstein says US unemployment rate may rise above 10% “Martin Feldstein, an economics professor at Harvard University, talks with Bloomberg’s Kathleen Hays about the outlook for the US unemployment rate. Feldstein also discusses Citigroup’s financial position, regulation of the banking industry, and the state of US and European economies.”
Source: Ambrose Evans-Pritchard, Telegraph, March 5, 2009.
CNBC: China is “flying on one engine” “China’s urban fixed asset investment is much more important now as it is ‘flying on one engine’ now, notes Michael Kurtz, head of China research & China strategist at Macquarie Research. He explains why to Michael Yoshikami of YCMNET Advisors, Daryl Guppy of Guppytraders.com, CNBC’s Martin Soong & Amanda Drury.”
The Wall Street Journal: Inside the Madoff Scandal “How did one of the largest financial scandals of our time go on for so long without being detected? WSJ reporters offer insight into Bernard Madoff’s alleged Ponzi scheme.”