A resurgent Wall Street faces a challenge in the coming week with results of “stress tests” of the banking system and unemployment data expected to reveal more massive job losses.
But, despite expectations of bleak news, some analysts say investors are looking further ahead toward recovery from the deep recession.
“Economic growth appears set to turn into positive territory near midyear, in line with our forecast,” Barclays Capital economist Dean Maki said, arguing that the downward spiral in financial markets and economy appears to be ending.
“One of the regularities of the business cycle is that financial markets improve before the economy, as investors look ahead to improving earnings,” he said. “This market improvement in turn helps the economy to recover by lowering borrowing costs for businesses and bolstering confidence. This positive feedback loop appears to be in place now.”
The main indexes resumed their upward trend in the past week, as the broad market rose for the seventh of the past eight weeks.
The Dow Jones Industrial Average climbed 1.68 percent for the week to 8,212.41, and has surged a stunning 25 percent since lows in early March.
The technology-heavy NASDAQ composite added 1.47 percent to 1,719.20 on the week and the broad-market Standard & Poor’s 500 index increased 1.3 percent to 877.52.
The market began this month on a positive note after last month produced powerful gains, lifting the Dow 7.3 percent, the NASDAQ a hefty 12.3 percent and the S&P by 9.4 percent.
One key for the market in the coming week will be the release of information about the government’s stress tests of 19 major banks to determine if they need additional capital.
Authorities are expected to release results on Thursday.
Reports suggest at least some of the banks may be short on capital, crimping their ability to lend and fuel economic growth under an adverse economic scenario.
The US government’s report on Friday on unemployment last month will provide an indication if the economy can regain momentum. If job losses accelerate, consumer spending and capital investment may fall further, imperiling a recovery.
Bonds extended their losses on the shift to equities in the past week. The yield on the 10-year US Treasury bond rose to 3.174 percent from 2.996 percent a week earlier and that on the 30-year bond increased to 4.088 percent from 3.876 percent. Bond yields and prices move in opposite directions.
Taiwanese Olympic badminton men’s doubles gold medalist Wang Chi-lin (王齊麟) and his new partner, Chiu Hsiang-chieh (邱相榤), clinched the men’s doubles title at the Yonex Taipei Open yesterday, becoming the second Taiwanese team to win a title in the tournament. Ranked 19th in the world, the Taiwanese duo defeated Kang Min-hyuk and Ki Dong-ju of South Korea 21-18, 21-15 in a pulsating 43-minute final to clinch their first doubles title after teaming up last year. Wang, the men’s doubles gold medalist at the 2020 and 2024 Olympics, partnered with Chiu in August last year after the retirement of his teammate Lee Yang
FALSE DOCUMENTS? Actor William Liao said he was ‘voluntarily cooperating’ with police after a suspect was accused of helping to produce false medical certificates Police yesterday questioned at least six entertainers amid allegations of evasion of compulsory military service, with Lee Chuan (李銓), a member of boy band Choc7 (超克7), and actor Daniel Chen (陳大天) among those summoned. The New Taipei City District Prosecutors’ Office in January launched an investigation into a group that was allegedly helping men dodge compulsory military service using falsified medical documents. Actor Darren Wang (王大陸) has been accused of being one of the group’s clients. As the investigation expanded, investigators at New Taipei City’s Yonghe Precinct said that other entertainers commissioned the group to obtain false documents. The main suspect, a man surnamed
US Secretary of the Treasury Scott Bessent and US Trade Representative Jamieson Greer began talks with high-ranking Chinese officials in Switzerland yesterday aiming to de-escalate a dispute that threatens to cut off trade between the world’s two biggest economies and damage the global economy. The US delegation has begun meetings in Geneva with a Chinese delegation led by Chinese Vice Premier He Lifeng (何立峰), Xinhua News Agency said. Diplomats from both sides also confirmed that the talks have begun, but spoke anonymously and the exact location of the talks was not made public. Prospects for a major breakthrough appear dim, but there is
The number of births in Taiwan fell to an all-time monthly low last month, while the population declined for the 16th consecutive month, Ministry of the Interior data released on Friday showed. The number of newborns totaled 8,684, which is 704 births fewer than in March and the lowest monthly figure on record, the ministry said. That is equivalent to roughly one baby born every five minutes and an annual crude birthrate of 4.52 per 1,000 people, the ministry added. Meanwhile, 17,205 deaths were recorded, resulting in a natural population decrease of 8,521, the data showed. More people are also leaving Taiwan, with net
RSS