The world stock markets in its last wave of bull rise – Europe advances on US interest rate outlook but fundamentals point to troubles
Marla Guthries
Nov. 15, 2006

The world stock markets in its last wave of bull rise – Europe advances on US interest rate outlook but fundamentals point to troubles.

The European stocks are advancing somewhat based on the US interest rate outlook. But the Euro zone growth is slowing very fast. The inflation outlook is comparatively high. The Euro bonds are getting ready for a blast off. The inflation in Europe will put a lid on the bond market advances.

The underemployment, stagflation and unemployment rise in Europe is significant. The UK unemployment reached a new high in recent years. The German sales tax increase will cause further problem.

The world stock markets are really vulnerable at this point.

The world stock markets in its last wave of bull rise – Europe advances on US interest rate outlook but fundamentals point to troubles
Marla Guthries
The European stocks are advancing somewhat based on the US interest rate outlook. But the Euro zone growth is slowing very fast.
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Fast slowdown in world economies - China's industrial output rose at the slowest pace in almost two years – Dow 5000?
Sam Adelton
There are other indicators that is showing gradual slowdown in Chinese economy. The net effect on world economies can be devastating dragging down stock markets to its knees.
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UK showing clear signs of stagflation now - unemployment rose in October to the highest level in almost five years
Peter Oberois
The number of people in UK claiming jobless benefits rose 1,200 to 961,300, the most since December 2001....
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Natural gas price can quadruple as Russia plans to set up a cartel like OPEC in Natural Gas – worldwide recession?
Alan Hersey
They thought they can get away from the crude oil price control by OPEC. Now they face a new cartel headed by the Russia.
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WalMart actions show underemployment the biggest problem in the economy – bearish for stocks
Sam Adelton
The WalMart results finally manifest the biggest problem of the economy. It is underemployment. People in Main Street are feeling poorer because salaries are not going up compared to real inflation.
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Stagflation finally gets hold of Western Europe - German confidence falls as Eurozone growth slows down – buy Eurobonds and sell Japanese bonds?
Peter Oberois
Given the strength in Japanese economy and equal weakness in Eurozone economies, it may be fantastic opportunity for a spread position – buy the eurobond and sell the Japanese bond.
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Japan to raise rates fast as economic growth accelerates – bullish for Yen and bearish for Japanese bonds and Nikkei 225
Peter Oberois
It is definitely bullish for Yen. Technically Yen is in the right position to go higher in the long term. The Japanese bonds yielding very little for decades can take a pounding in coming months as rates go higher.
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President Bush and Democrats plan to work together in helping US automakers manage healthcare cost, energy and trade – time to buy GM and Ford?
Marla Guthrie
It resembles the initiatives that former US President Ronald Reagan took in late eighties. The measures made it necessary for Japanese carmakers start assembling and making cars in US based plants.
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