Global Markets.
Thursday, November 24, 2011. 9.50 a.m. With the U.S. market closed today for the Thanksgiving holiday let’s look at a couple of global markets. Typical of most of Europe, the German market has been down for 8 straight days, and is now down 13.8% from its October 28 high. European markets were back up strongly [...]

Thursday, November 24, 2011. 9.50 a.m.

With the U.S. market closed today for the Thanksgiving holiday let’s look at a couple of global markets.

Typical of most of Europe, the German market has been down for 8 straight days, and is now down 13.8% from its October 28 high.

European markets were back up strongly earlier today, Germany and France up 1.8%. But they have given most of those gains back in the last hour or so.

Was the positive start to the day because of the positive surprise from the report that the Ifo German Business Confidence Index rose in October to 106.6 from 106.4 in September, while the consensus forecast was for a decline, as the financial media is saying?

Or is it technical in nature, that the decline in November has European markets very oversold short-term beneath short-term moving averages, and perhaps due for a bounce off the oversold condition that should be sold into? 

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Or is it potentially more positive, that what we’ve been seeing this month is just a continuation of the volatility of last summer, but with the width of the trading band expanded?

But the news from Europe remains discouraging.

Trade unions are staging a 24-hour strike in Portugal today to protest the austerity measures the government agreed to impose in exchange for the international bailout earlier this year. And Fitch Ratings downgraded Portugal’s government credit rating to junk bond status this morning.

More problematic, European leaders are still not on an agreed path to solving their debt crisis. German Chancellor Merkel, French President Sarkozy, and new Italian Prime Minister Monti are meeting in France today to discuss ways to handle the crisis. Germany and France remain at odds. Yesterday, European Commission President Barrosa announced wide-ranging proposals, including various types of bonds that would be issued jointly by euro-zone countries. But they are just proposals. This morning, Germany’s Economics Minister repeated his strong rejection of creating a common euro-zone bond.

There was encouraging news from the United Kingdom, with the report that GDP in the U.K. grew 0.5% in the 3rd quarter, from only 0.1% growth in the 2nd quarter. But it was only in line with forecasts and does little to dispel concerns. The U.K.’s coalition government remains committed to its austerity measures to reduce its budget deficit, expected to inadvertently slow its economy. But at the same time has said it will announce measures to stimulate economic growth, and the U.K. central bank says it will buy an additional 75 billion pounds of U.K. bonds to stimulate the economy, in addition to the 200 billion it already bought.

The short-term chart of the U.K. market has an appearance similar to that of Germany.

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In Asia

China’s aggressive tightening measures are showing enough success in bringing inflation under control that it’s been expected that its government would begin loosening its policies to make sure its economy doesn’t slow too much.

And last night China’s central bank reported that it has lowered the reserve requirement for six of its banks. But it said the move shouldn’t be seen as a policy easing move?

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Subscribers to Street Smart Report: In addition to the charts and analysis in the Premium Content area of today’s blog post, there is an important in-depth U.S. markets signals and analysis report on the Street Smart Report website from yesterday afternoon and a hotline from last evening.

Yesterday in the U.S. Market.

Yet another ugly down day on more bad news from Europe as an important bond auction in Germany was assessed as being a ‘disaster’. The Dow was down 185 points mid-afternoon but began recovering and was down ‘only 150 points just 5 minutes before the close. Then as shown in the intraday chart, it suddenly plunged straight down 90 points in less than 5 minutes to close down 236 points, or 2.0%.

More than a third of the day’s total volume took place in those 5 minutes. It was a clear indication that traders were not willing to hold positions over the weekend, and probably left early, leaving behind a ton of ‘sell-on-close’ orders for their positions.

Yesterday’s intra-day chart:

image

The Dow closed down 236 points, or 2.0%. The S&P 500 closed down 2.2%. The NYSE Composite closed down 2.5%. The Nasdaq closed down 2.4%. The Nasdaq 100 closed down 2.2%. The Russell 2000 closed down 3.2%. The DJ Transportation Avg. closed down 2.4%. The DJ Utilities Avg closed down 1.5%.

Gold closed down $5 an ounce at $1,690 an ounce.

Oil closed down $0.42 a barrel at $95.75.

The U.S. dollar etf UUP closed up 1.1%.

The U.S. Treasury bond etf TLT closed up 1.0%.

Yesterday in European Markets.

Markets in Europe also closed down again yesterday, but not as much as the U.S. market. London closed down 1.3%. The German DAX closed down 1.4%. France closed down 1.7%.

Asian Markets Closed Down Tuesday Night But Up Last Night.

The Asia Dow closed up 0.5% last night.

Among individual markets last night:

Australia closed down 0.3%. China closed up 0.1%. Hong Kong closed up 0.4%. India closed up 1.0%. Indonesia closed up 0.3%. Japan opened after a one-day holiday and caught up on the downside, closing down 1.8%. Malaysia closed up 0.8%. New Zealand closed down 0.8%. South Korea closed up 0.7%. Singapore closed up 0.1%. Taiwan closed up 0.9%. Thailand closed up 0.4%.

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Markets This Morning.

European markets were sharply to the upside earlier today for a change, but have given up most of those gains. The London FTSE is up just 0.1%. Germany’s DAX is up 0.5%. France’s CAC, up 1.8% earlier is now down 0.2%.

Oil is up $0.35 a barrel at $96.52.

Gold is up $3 an ounce at $1,695 an ounce.

This morning in the U.S. Market:

U.S. market are closed today for the Thanksgiving holiday, and will be open only a half-day tomorrow. But even this holiday shortened week has been a fairly heavy week for potential market-moving economic reports, including Existing Home Sales, a revision to 3rd quarter GDP, and Durable Goods Orders. To see the schedule of the week’s reports click here, and look at the left side of the page it takes you to.

Monday’s reports were that Existing Home Sales rose 1.4% in October, better than the consensus forecast of a decline. The Chicago Fed’s National Business Activity Index improved to -0.13 in October from a positively adjusted –0.20 in September.

Tuesday’s reports were that 3rd quarter GDP growth was revised down to 2.0%, from the pervious report of 2.5%.

Yesterday’s reports were that Durable Goods Orders fell 0.7% in October due to a decline in orders for commercial aircraft, which fell 16.4%. Excluding transportation orders, durable orders in the general economy were up 0.7%. And personal income was up 0.4% in October, while spending was up 0.1%. And the University of Michigan Consumer Sentiment Index rose to 64.1 in November from 60.9 in October.

There will be no further reports in the U.S. until Monday.

However, in Europe, the German Ifo Business Confidence Index surprised on the positive side, rising to 106.6 in October, better than the consensus forecast of a decline. 

NOTE: U.S. markets will be closed all day today for the Thanksgiving holiday, and will close early on Friday. Our offices will be closed until Monday morning.

Subscribers to Street Smart Report: In addition to the charts and analysis in the Premium Content area of today’s blog post, there is an important in-depth U.S. markets signals and analysis report on the Street Smart Report website from yesterday afternoon and a hotline from last evening.

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I’ll be back Saturday morning with the regular Saturday morning post, as usual probably later than the week-day posts, probably around 11:00 a.m. (This blog appears every Tuesday, Thursday, and Saturday morning!).

**** End of Today’s post*****

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