BetterTrades

February 25, 2009

On the world stage, overseas markets were mixed in trading today, as the domestic indices all posted losses of more than 2% each.

Over in the Asian Rim, Japan’s Nikkei 225 closed the session up 2.65% to 7,461.22, coming off yearly lows as the index has lost more than 18% since the start of the year, due mainly to poor economic conditions and dire company reports. Within the markets, Toyota jumped 4.2% in trading, while Honda Motor Co. gained more than 8%.

Meanwhile, Hong Kong’s Hang Seng gained 1.61% to close at 13,005.08, after being up more than 2.7% during the earlier session. It too rebounded off yearly lows today, but investors remain concerned that the government is not doing all that it can in order to get the country out of their current recession.

As Hong Kong’s recession worsens, the government plans to cut salary taxes by 50%, benefiting some 1.4 million taxpayers. With GDP falling 2.5% in the 4th quarter as exports dwindle, the Hang Seng Index has dropped 53% since the beginning of the year.

Across the pond, European stocks declined for the fourth straight day as the Dow Jones Stoxx 600 Index dropped 0.38% to 1769.68 after gaining as much as 1.9%. Leading the way in the decline was Swiss drug maker Novartis AG, which warned investors of a 1Q decline in profits as the stock dropped 1.9% by the close.

The U.K.’s major index, the FTSE 100 posted a modest gain today, adding 0.85% to close at 3,848.98, despite the pound’s drop in value against the Euro and the Dollar. With an 18% decline in value against the Euro in the past year, the pound continues to concern investors as to the health of Britain’s economy.

In other news, the International Monetary Fund (IMF) announced today that Pakistan’s monetary policies have improved over the past few months, following a $7.6B “stand-by” lending program from the IMF that was approved last October. If Pakistan can fend off the global recession for a little while longer, the IMF claims that the country’s stance on monetary policy is "appropriate and will continue to promote domestic and external stability."

In another country, facing economic troubles, Greeks, disgruntled with the country’s current economic woes, protested against the government today by shutting down the airport along with many other public services. Greece’s national carrier, Olympic airlines had to ground nearly 70 flights along with rescheduling others.

During the protest, public schools were closed, while public offices were sealed off keeping government workers from entering the buildings. With numerous years of sustaining a 4% growth rate in the country, Greece has seen their economic standing deteriorate as the global recession continues to worsen.

As the government continues to lag in combating the economic crisis, officials have committed to infusing some $36B, or 26B Euros, into the economy to help with the massive public and fiscal debts. Last month, farmers striked in protest of low produce prices and last week, truckers went on strike to help with a crackdown on unlicensed drivers.

In currency trade, the U.S. Dollar was higher against the major currencies today, as the 16-nation Euro traded lower against the greenback, buying $1.2704, down from yesterday’s price of $1.2789, while the British pound lost ground against the Dollar as well, buying $1.4199, down from last night’s price of $1.4335. Finally, against the Japanese yen, the greenback advanced as well buying 97.66, up from Tuesday’s price of 96.76.

2009 Better Trades Article

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BRIAN MULLIN