Eurozone Woes Drive Markets Down

Published by Filipe R. Costa on Thu, 27/09/2012 - 10:45
Mariano Rajoy

Daily Market Commentary for September 27: Social unrest in Spain and Greece continues to be a major threat to Euro stability. People has been widely against austerity measures as they have been ineffective in solving problems.

The latest five days have been very negative for equities with investors concerned with what is going to happen in the Eurozone. Everyone is expecting Spain to ask for a full bailout but the country just can’t do that. Rajoy knows how strong people’s protests have been and he’s scared of what could happen if he announces a full bailout. People in Spain, Greece and Portugal is tired of being asked to sacrifice in the name of recovering the economy and pay creditors but truth is that even though they have seen their income cut, their economy under heavy recession, their employment vanishing, public finances have deteriorated. It’s time to implement some employment boosting measures instead of continuing with the austerity. Social unrest has been largely unregarded as a major problem, but I’m really concerned that it can create major problems inside not only the Eurozone but also the European Union. If Germany continues to insist in austerity, Europe will break-up.

Looking at markets, the picture isn’t rosy. Equities are on downtrend, gold moved down abruptly and oil continues to move down as demand is weak. Today Spanish PM is expected to announce preliminary measures for the 2013 budget. Many think he can ask for a bailout at the same time but that’s more in faith territory than reality.

Name Last price Close Price % 5-Day % YTD %
Apple Computer Inc 26/09/2012 66520 -1.23 -5.26 64.25
DAX (Xetra) 26/09/2012 7276.51 -2 -1.55 23.37
Nasdaq 100 Index 26/09/2012 2781.63 -0.82 -2.88 22.12
S&P 500 26/09/2012 1433.32 -0.57 -1.9 13.97
Gold (LBM) $ 26/09/2012 174460 -1.56 -1.59 11.34
Euronext 100 26/09/2012 652.23 -2.23 -2.44 10.02
Dow Jones Industrial Average 26/09/2012 13413.5 -0.33 -1.21 9.79
CAC 40 26/09/2012 3414.84 -2.82 -3.31 8.07
Nikkei 225 26/09/2012 8906.75 -2.03 -3.53 5.34
GBP/USD - US $ per £ 26/09/2012 1.6174 -0.11 -0.36 4.15
FTSE 100 26/09/2012 5768.09 -1.56 -2.04 3.51
AUD/JPY - JPY per Australian $ 26/09/2012 80.577 0.02 -1.84 2.67
AUD/USD - US$ per Australian $ 26/09/2012 1.0371 0.09 -0.95 1.61
Crude oil (Brent) Composite 26/09/2012 10906 -1.03 -0.31 1.54
USD/CHF - Swiss Fr per US$ 26/09/2012 0.9392 0.17 1.38 0.17
EUR/CHF - Swiss Fr per Euro 26/09/2012 1.2096 0.01   -0.45
EUR/USD - US$ per Euro 26/09/2012 1.2878 -0.16 -1.38 -0.59
EUR/GBP - £ per Euro 26/09/2012 0.7962 -0.05 -1.02 -4.44
Crude oil (Light Sweet) Composite 26/09/2012 9027 -0.75 -2.05 -8.82
Research in Motion Ltd 26/09/2012 700 6.06 -2.91 -51.72