Banks Raising Funds Offers Hope

The stock market bears in the US, UK, and Japan have been giving hope. They can no longer say they are not seeing a change in the market as the interest rates fall and Banks are able to replenish their funds. Banks have accessed about 140 billion USD in equity sales. Most of the investors expected the market to decline over the next half of the year. These declines could still be seen in the Standard and Poor’s 500 Index, France’s CAC 40, the FTSE 100, Italy’s Index, the Swiss Index, and even the Japanese Nikkei. Germany is the only place still experiencing a little pessimism a recent poll showed. This poll asked 4,444 users worldwide regarding their investments.

The MSCI World Index has even picked up. They rebounded by 6.5 percent. Until this recent rebound they were in a 17 month decline. In other news JP Morgan Chase and CO. had to bail out Bear Sterns when the US interest rates fell off. The Federal Reserve has decided they need to act as a lender in some cases in order to save the securities firms suffering from lack of funds. Banks and brokers have seen over 245 million dollars in losses and write downs as a result of the subprime crash in the US.

Francisco Salvador the director of Venture Finanzas SA in Madrid believes the worst is behind them. Salvador sees hope that the banks are beginning to build the revenue back up. Confidence is even returning for many investors who usually put their money in the banks.

Some investors are still remaining cautious however. Company profits for a number of businesses are down. Alcoa, General Electric, and UPS have all published their first quarter profits at a loss. In fact the numbers have trailed the analysts’ projections by a significant amount. Goldman Sachs has also offered a lower earnings estimate for the entire 2008 year. They are expected to make the Standard and Poor’s 500 index lower because of the recent release of numbers. Morgan Stanley believes the US recession and competition is going to keep the numbers low for many of the companies.

While some of the confidence has increased the majority of analysts and economists are fearful of investing in the market. Part of the saving grace in the US market is the Fed’s moves to help restore confidence. They acted quickly in the case of Bear Stearns to keep the panic to a minimum and restore the confidence.

The central bank decided to lend JPMorgan 29 billion dollars in order to acquire Bear Stearns. Bear Stearns used to be the fifth largest bank in the US. JP Morgan had to create a new loan facility for securities and cut its loan rates overnight to 2.25 percent in order to save Bear Stearns. The Fed’s actions have not stopped the risk, but they have helped to minimize it.

Lehman Brothers Holdings and Morgan Stanley believe the worst is behind the US for the credit market crunch. They believe the security firms are able to help the global stocks since they have offered numbers above the projections. This has also helped to reduce the fear regarding the seizure in the markets.

Citigroup, Merrill Lynch, and Wachovia Corp have been able to raise 140 billion dollars since last year in order to help their companies. Investors in the US, UK and Italy have all reported the biggest gains in the last month. In a recent survey the confidence index has increased to 34.6 percent in the US in the last month. It was at 24 percent in March. The UK has seen an increase from 21.4 to 26.4 percent. The UK has the lowest confidence numbers regarding the survey, but there is still hope.

Italy showed an increase of almost ten percent from 39.7 top 48.7 percent. Readings below 50 percent mean that the countries are still hesitant regarding their stocks. In fact they expect the stocks to fall rather than rise in the next six months.

There is still an improved outlook regarding the stock market. Looking at Japan, Spain, Hong Kong, Switzerland, and France investors have decided it is safe again to place their money on the market to earn. John Haynes an US equity strategist believes the fourth quarter is going to have the best improvements. The S&P 500 has also showed some changes in the last month. It was at a 19 month low in March, but they have gained 4.8 percent in the last few weeks. The Dow Jones has gained 7.1 percent in 2008 and Asia Pacific is at 9.6 percent increase.

Brazil is the only place at the moment where gains are predicted by investors. Commodities are expected to rally their market such as metals, oil, and sugar. Though Brazil has seen a dip in confidence.

Back To Financial News April 2008
Travel Rewards With Your Credit Card
APS and Prepaid Gold MasterCard
The Figures On Credit Card Balance Transfers
Pointers for Balance Transfers
Credit Card Interest
Credit Offers Limited
Executive’s Life Ruined by ID Theft
Getting Around Life’s Obstacles
How To Borrow A Grand
Paying for a Good Credit Rating
UK Debt and the Mortgage Industry
Abuse of Government Credit Cards
Asian Growth Helps UK
Banks Raising Funds Offers Hope
Darling and UK Banks Going Head to Head
Estate Agents and Card Fraud
Government to Help UK Banks
Insuring UK Gardens
Interest Rates Rising with Underhanded Techniques
Lost Luggage Insurance Removed
Overdraft Charges Increase Credit Card Balances
Prediction: 10 Percent Drop in Insurance Market
Rise in the Housing Market Prices
The Scams With Telephone Calls and Security Codes
UK Insurance Costs Rising