Unable to shake off credit market angst, Wall Street turns its attention to an upcoming US Federal Reserve meeting where policymakers will attempt to restore market confidence.
Confidence was shaken again in the the past week as investment giant Bear Stearns said it had gained emergency funds from the Federal Reserve Bank of New York and rival bank JPMorgan Chase to shore up its stretched finances.
Market participants said Bear Stearns' woes, triggered by mounting losses from mortgage-backed securities, and ongoing economic worries will likely spur the Fed to cut US interest rates at a policy meeting on Tuesday.
Most economists expect the US central bank to cut its key short-term federal funds interest rate, but opinion is divided over the size of a possible cut. Analysts believe it will be between 50 and 100 basis points, marking a significant reduction in borrowing costs.
The Fed has slashed its fed funds rate by 225 basis points to 3 percent since September in a bid to shore up economic momentum which is being threatened by a multiyear housing slump, a credit crunch, rising jobs cuts and skyrocketing crude oil prices.
Despite such turmoil, the stock markets mostly posted modest gains in the past week.
The leading blue-chip Dow Jones Industrial Average rose 0.48 percent for the week ended on Friday to close at 11,951.09 points, although the index is down 10 percent for the year to date.
The NASDAQ composite finished the week unchanged at 2,212.49, while the broad-market Standard & Poor's 500 index gained 0.4 percent to 1,288.14.
"We are projecting that the FOMC [Federal Open Market Committee] will vote to reduce the federal funds rate by 75 basis points on March 18. There is an outside chance of a deeper 100-basis-point cut, given turbulent conditions in financial markets," economists at Global Insight said in a briefing note.
The yield on the 10-year Treasury bond declined to 3.421 percent from 3.541 percent a week earlier, while that on the 30-year bond fell to 4.348 percent from 4.541 percent.
The seizure of one of the largest known mercury shipments in history, moving from mines in Mexico to illegal Amazon gold mining zones, exposes the wide use of the toxic metal in the rainforest, according to authorities. Peru’s customs agency, SUNAT, found 4 tonnes of illegal mercury in Lima’s port district of Callao, according to a report by the non-profit Environmental Investigations Agency (EIA). “This SUNAT intervention has prevented this chemical from having a serious impact on people’s health and the environment, as can be seen in several areas of the country devastated by the illegal use of mercury and illicit activities,”
NEW PRODUCTS: MediaTek plans to roll out new products this quarter, including a flagship mobile phone chip and a GB10 chip that it is codeveloping with Nvidia Corp MediaTek Inc (聯發科) yesterday projected that revenue this quarter would dip by 7 to 13 percent to between NT$130.1 billion and NT$140 billion (US$4.38 billion and US$4.71 billion), compared with NT$150.37 billion last quarter, which it attributed to subdued front-loading demand and unfavorable foreign exchange rates. The Hsinchu-based chip designer said that the forecast factored in the negative effects of an estimated 6 percent appreciation of the New Taiwan dollar against the greenback. “As some demand has been pulled into the first half of the year and resulted in a different quarterly pattern, we expect the third quarter revenue to decline sequentially,”
DIVERSIFYING: Taiwanese investors are reassessing their preference for US dollar assets and moving toward Europe amid a global shift away from the greenback Taiwanese investors are reassessing their long-held preference for US-dollar assets, shifting their bets to Europe in the latest move by global investors away from the greenback. Taiwanese funds holding European assets have seen an influx of investments recently, pushing their combined value to NT$13.7 billion (US$461 million) as of the end of last month, the highest since 2019, according to data compiled by Bloomberg. Over the first half of this year, Taiwanese investors have also poured NT$14.1 billion into Europe-focused funds based overseas, bringing total assets up to NT$134.8 billion, according to data from the Securities Investment Trust and Consulting Association (SITCA),
Taiwan’s property transactions in the first half of this year fell 26.4 percent year-on-year to about 130,000 units, as credit controls and mortgage restrictions dampened demand, data from the Ministry of the Interior showed yesterday. Keelung saw the steepest decline, with transactions plummeting 45.6 percent to just 2,041 units — the lowest since the ministry began its survey in 2006. In contrast, Miaoli County was the only region to experience year-on-year growth, with transactions rising 2.4 percent to 3,229 units. Great Home Realty Co (大家房屋) attributed the increase in deals in Miaoli, particularly Jhunan (竹南) and Toufen (頭份) townships, to spillover demand
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