Bullish Mood Vanishing, Social Unrest Rising

Published by Filipe R. Costa on Tue, 18/09/2012 - 11:43
social unrest

Daily Market Commentary for September 18: The bullish mood is rapidly vanishing as Europe returns to the centre of all attentions. Spanish is resisting a full bailout and yield spreads on worrisome countries started increasing again. Social unrest is picking up and it seems there is much still to do in EU.

During the weekend social unrest picked up in Portugal as many went to the streets to show their concern on the new measures the government wants to implement. At a time unemployment is at historical highs, government is trying to implement additional austerity measures rising taxes and social contributions. Portuguese people has been on the sidelines but this time demonstrated what enough means. The government alliance is entering a difficult period as CDS is seen jumping out its coalition with the social democrats. In Spain social unrest continues with people showing they won’t give government a second to breathe if it were to implement further austerity and that is why the Spanish government is resisting to ask for a full bailout.

While the unrest is picking up again, the Euro is retreating and European markets edging lower. The Dow is also not willing to continue the uptrend. Last week it edged above 13,600 but quickly retreated to 13,500 and is now testing 13,400 as the effects of QE3 were already priced in.

Name Last price Close Price % 5-Day % YTD %
DAX (Xetra) 17/09/2012 7403.69 -0.11 2.63 25.52
Nasdaq 100 Index 17/09/2012 2856.44 0.04 2.44 25.4
S&P 500 17/09/2012 1461.19 -0.31 2.25 16.19
Gold (LBM) $ 17/09/2012 177060 -0.21 2.26 13
CAC 40 17/09/2012 3553.69 -0.78 1.36 12.47
Dow Jones Industrial Average 17/09/2012 13553.1 -0.3 2.25 10.93
FTSE MIB 17/09/2012 16470 -0.93 2.35 9.15
Nikkei 225 17/09/2012 9159.5   3.27 8.33
FTSE 100 17/09/2012 5893.52 -0.37 1.73 5.76
GBP/USD - US $ per £ 17/09/2012 1.6241 0.14 1.46 4.58
EUR/USD - US$ per Euro 17/09/2012 1.3108 -0.16 2.43 1.19
Crude oil (Light Sweet) Composite 17/09/2012 9697 -2.09 0.72 -2.05
EUR/GBP - £ per Euro 17/09/2012 0.8071 -0.31 0.96 -3.13
IBEX 35 17/09/2012 8148 -0.08 3.69 -4.88