Capitalogix Commentary 11/29/10 - Have You Ever Seen a Leprechaun Beg?

The markets are showing remarkable resilience in the face of bad news and global unrest. This coming week will be another test, because of the uncertainty surrounding what's happening in Ireland, the fallout from insider trading investigations, and a somewhat oversold market.

Why should insider trading affect the market? Because institutional investors are going to try and get out of any fund they're worried about meeting part of that investigation. The result will be massive redemptions and a lot of selling.  It is certainly something to watch.

Let's Look at World Markets.

 

It has been a tough two weeks for global markets.  Most major indices are down; and, yet, that is not so bad considering the news about sovereign debt, war, and global cooperation.

 

Who Is Bailing Out Ireland?

Expect the questions about who will bail out Ireland to weigh on the markets.  Here is a graphic that explains the situation (click on it for a bigger version).

 

What About the Euro?

According to the Financial Times, BlackRock's founder Larry Fink, founder of BlackRock, the world’s largest money manager, believes that the euro will fall sharply as a result of the escalating eurozone crisis and turmoil in financial markets.

In an interview with the Financial Times, Fink predicts that the single currency, battered this week by the fear that the fall-out from Ireland’s debt problems will spread to other countries including Portugal and Spain, will fall to $1.20 against the dollar, a slide of nearly 10 per cent.

What Level of Holiday Sales Will Santa Bring?

Another driver worth watching will be how the market responds to holiday sales.  Black Friday is one thing; the issue is whether consumers will spend real money throughout the season.

Business Posts Moving the Markets that I Found Interesting This Week:

• Do We Really Need Wall Street? (TheWeek)
• What, If Anything, Is the Future of Coal? (GreenBiz)
• Saudi Prince Alwaleed Invests $500 Million in GM. (WSJ)
• SAP Must Pay Oracle $1.3 Billion Over Unit’s Downloads. (Bloomberg)
• Fed Lowers Economic Expectations for 2011. (WashingtonPost)
• More Posts Moving the Markets.

Lighter Ideas and Fun Links that I Found Interesting This Week

• Are Amazon & Netflix Making Too Many Decisions For Us? (Forbes)
• The Correlation Between Money & Happiness. (Economist)
• Some Stats About the Ritualized Turkey Massacre. (Ritholtz)
• Apple Sells 2 Million Beatles Songs, 450,000 Albums in One Week. (iDygest)
• Is North Korea Moving Another 'Red Line'? (Stratfor)
• More Posts with Lighter Ideas and Fun Links.