CommStock Israel Investor
Insights Newsletter
Monday, October 27th, 2008
The following report has been prepared as a courtesy
to clients of CommStock Trading Ltd. for general informational
purposes only and is not intended to, and should not, be construed
as any recommendation or advice for any specific investment decisions.
If you would like to be added to or removed from this service,
please e-mail: mona@ecommstock.com
1) Asian
stocks suffer brutal losses
Hong Kong shares plunge 13%
as fears of global recession sweep region. Nikkei closes at 26-year
low.
Last Updated: October 27, 2008: 4:03 AM ET
LONDON (CNNMoney.com) -- Stocks in Asia took another
heavy beating Monday, with shares in Japan falling to their lowest
level in 26 years, as fears of a global recession continued to
sweep the region.
Tokyo's benchmark Nikkei index closed down 6.4% -- its
worst closing level since October 1982. Hong Kong shares were pummeled,
with the Hang Seng index plunging 12.9%.
U.S. futures,
which offer an indication of how Wall Street will open when trading
begins in New York, were sharply lower.
Tokyo stocks stumbled as the yen fluctuated near a record
high against the dollar. A stronger yen makes Japanese exports
relatively more expensive.
Financial ministers and central bank presidents of the
world's seven leading industrialized nations, meeting in Tokyo,
said the situation has their full attention.
"We are concerned about the recent excessive volatility
in the exchange rate of the yen and its possible adverse implications
for economic and financial stability," the Group of Seven said
Monday in a statement.
The finance ministers and bankers said they would "cooperate
where appropriate" to help stabilize world markets. They said they
were monitoring the situation closely.
"We reaffirm our shared interest in a strong and stable
international financial system," the statement said.
Elsewhere in Asia, the Taiwan Weighted was off 4.7%.
Australia's All Ordinaries index finished the day off 1.7%, while
the KOSPI in Seoul, South Korea, was the lone Asian bright spot,
closing up nearly 1%.
The index rallied after South Korea's central bank slashed
its key interest rate Monday by three-quarters of a percentage
point - its largest cut ever - in an effort to fend off the global
financial turmoil.
Wall Street closed last week on a negative note as investors
bought into the notion that a recession is imminent - if not already
under way.
The Dow Jones Industrial Average lost 312 points, or
3.6%, Friday. The Standard & Poor's 500 index lost 3.5%,
and the Nasdaq composite lost 3.2%.
2) Commentary by David Zwebner, CEO
of CommStock Trading
Our Kivun CommStock Commodity Futures Fund is now one of the top
4 Funds in Israel…. Up over 17%
this month. We are presently short Coffee and Sugar, expecting
these prices to continue their downward momentum.
http://www.funder.co.il/fund.aspx?id=5107966
U.S. Economy
Sub-prime mortgages, AIG, Lehman Brothers, the liquidity panic,
and now global recession. What next? Global stock markets were
sharply lower overnight, hurt by fresh and growing fears of a
global recession (see U.K. news below). The S&P 500 index
is down roughly 42% from one year ago.
Using the Morgan Stanley country index funds, stocks
in:
Australia are down 60% from a year ago.
Canada are down 50% from a year ago.
The U.K. are down 56% from a year ago.
Japan are down 40% from a year ago.
Most commodities were lower again, hurt by talk of a
global recession and another jump in the U.S. dollar. It may be
hard to explain, but the September eurodollars fell .17 to 97.45.
Here is some good news - The National Association of
Realtors said that existing home sales were at an annual rate of
5.18 million units, up 5.5% in September and the best monthly increase
in five years. Freddie Mac reported that 30-year fixed mortgage
rates averaged 6.04% this week, the lowest in five weeks. January
lumber ended up .10 at $194.50.
Energies
OPEC met and agreed to reduce oil production by 1.5 million barrels
per day, but there is already talk that the production cut may
not be enough to keep up with how fast world demand is falling.
December crude oil closed down $3.69 at $64.15.
Grains and Cotton
Rain is blanketing the eastern half of the U.S. today (except for
the Northeast), adding to delays in planting. After today, the
Midwest is due for seven days or more of sunshine. December corn
fell 17.5 cents to $3.727, the lowest close in over a year.
Metals
December copper finished down 11.80 cents at $1.6865, down 58%
from its high less than four months ago. December gold closed
up $15.60 at $730.30, one of the few commodities that was higher
on the day.
Currencies
The U.K.'s Office for National Statistics said that real GDP was
down .5% in the third quarter, much weaker than expected and
the slowest quarter of growth in nearly 18 years. From a year
ago, real GDP was up .3%. The December British pound dropped
2.44 cents to a new contract low of $1.5844.
Statistics Canada reported that consumer prices were
up 3.4% in September from a year ago, down slightly from the 3.5%
annual gain in August.
Japan's economy has had a slow growth rate for several
years, but now that the rest of the world is coming down to its
level, the December yen is trading much higher and closed up .0178
today, at a new contract high of 1.0624.
Australia's economy is in pretty good shape compared
to the rest of the world, but you wouldn't know that by looking
at its currency. The December Australian dollar fell 3.19 cents
to a new contract low of 61.99.
Real GDP in South Korea was up 3.9% in the third quarter
from a year ago, the slowest growth in three years.
David Zwebner, CEO
CommStock Trading Ltd.
Tel: +972-(0)2 624-4963
Fax: +972-(0)2 624-4876
www.ecommstock.com
3) A Fan of Forex?
Interested in reading perspectives and analyses on the
Forex market? In learning what factors affect the Forex market
every week and what to be on the lookout for? In getting trade
recommendations? Email mona@ecommstock.com to
get your copy of a weekly Forex report.
4) Closing Prices for Friday, October
24, 2008
Amidex: Amidex35 (Class No Load Shares),
$10.28; Index, 1363.25, Daily Change, -1.93%; “A” Shares NAV, $7.92.
Global Asset Management: Capital
Appreciation, $187.40; Composite Absolute Return, $797.20; Diversity,
$673.34; GAMCO, $611.80; Interest Trend, $171.84; Trading IV-US$
Class, $142.16; US$ Special Bond Fund, $325.86.
Invesco: Asian Equity Core, $2.47; Bond, $24.87;
Emerging Markets Bond, $13.62; European Bond, EUR 4.3160;
Gilt, GBP 12.22; Global High Income, $8.71; Japanese
Equity Core, $1.080; UK Equity, GBP 3.64.
JPMorgan Fleming: JF Eastern Smaller
Co., $54.31; JF Japan, JPY 10,833; JF Japan Equity, $9.31;
JF Japan OTC, JPY 690; JF Japan Smaller Companies, JPY
24,591; JF Japan Technology, JPY 29,427; JF Korea, $19.83;
Pacific Securities, $128.68; Pacific Smaller Companies
$13.55; Global Bond & Currency, $20.46;
JF America, $30.60; JF Europe, $25.46; JF Germany, EUR
13.59; JF Global Equity, $25.33.
PCP: North America, $10.15; Europe,
$14.12; Emerging Markets, $12.78; Balanced, $7.17; Aggressive,
$5.79.
Platinum (updated once a month – September 2008
Prices): All Weather, $130.87; Equity Plus, $88.83;
Prot. Equity Plus, TBA; Prot. Income Plus, TBA; Cap.
Prot. Income Plus A, TBA.
Scottish Provident: Adventurous 1,
GBP 2.037; Balanced 1, GBP 1.805; USD Adventurous 1, $1.408;
USD Balanced 1, $1.596; USD Cautious 1, $1.678; For
Preference: Baring GUF Eastern Europe, $52.04;
Fidelity Funds International, $22.140; Invesco Asian
Equity Core, $2.640.
Mona Liss
CommStock Trading Ltd
PO Box 7777
Jerusalem 91077
Tel: +972-2-6244963
Fax: +972-2-625 9515
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