US stocks may get a lift in the week ahead, as regulators are expected to name the first round of banks allowed to repay bailout funds. The move could feed hopes that the banking system is stabilizing further.
But widespread skepticism over the sustainability of the recent rally from 12-year lows in March remains as bears keep looking for signs of economic weakness.
The wild cards in the coming week include the jump in the price of oil, now near US$70 per barrel, and the leap in US Treasury bond yields, with the 10-year note’s yield near 4 percent.
Investors also will sift through a government report on last month’s retail sales and data on consumer sentiment for clues about the state of mind of consumers, whose spending accounts for two-thirds of US economic activity.
“From the market’s point of view, the repayment of TARP [Troubled Asset Relief Program bailouts] is a big positive in that it shows that private equity is available and capable of coming in and funding the banks,” said Marc Pado, US market strategist at Cantor Fitzgerald & Co in San Francisco.
But even though the repayment of money from the US$700 billion TARP is seen as an important psychological step, there are also concerns that the banks may repay the money too soon while selective repayments may stigmatize some lenders.
“The potential negative is that people start looking at it and saying these guys have been able to pay it back, but other people haven’t,” said Doug Roberts, chief investment strategist at Channel Capital Research in Shrewsbury, New Jersey. “There could be a concern that the government will have to go back in again.”
There is also concern that the repayment of TARP may rob the economy of money that could be lent to consumers and businesses.
The S&P 500 index is up nearly 40 percent since a hitting a 12-year closing low on March 9, largely on hopes of an economic recovery. But indexes have drifted since early last month as investors look for more catalysts to drive the market.
Stocks finished the week with gains, with the Dow Jones industrial average up 3.1 percent, the Standard & Poor’s 500 Index up 2.3 percent and the NASDAQ up 4.2 percent.
The Dow Jones Industrial Average rallied 3.1 percent in the week to Friday to 8,763.13, the best level in five months for the blue-chip index, which is now off just 0.15 percent for this year.
The NASDAQ climbed 4.2 percent to 1,849.42, leaving the tech-dominated index up 17 percent for the year and near its highest level since October.
The broad-market Standard & Poor’s 500 index rose 2.3 percent on the week to 940.09, up 4 percent for this year after hitting a seven-month high during the week.
The sizzling three-month rally has pushed up the Dow index by some 34 percent since lows hit on March 9, while the S&P index is up 39 percent and the NASDAQ 45 percent.
CHAMPIONS: President Lai congratulated the players’ outstanding performance, cheering them for marking a new milestone in the nation’s baseball history Taiwan on Sunday won their first Little League Baseball World Series (LLBWS) title in 29 years, as Taipei’s Dong Yuan Elementary School defeated a team from Las Vegas 7-0 in the championship game in South Williamsport, Pennsylvania. It was Taiwan’s first championship in the annual tournament since 1996, ending a nearly three-decade drought. “It has been a very long time ... and we finally made it,” Taiwan manager Lai Min-nan (賴敏男) said after the game. Lai said he last managed a Dong Yuan team in at the South Williamsport in 2015, when they were eliminated after four games. “There is
Chinese Nationalist Party (KMT) lawmakers have declared they survived recall votes to remove them from office today, although official results are still pending as the vote counting continues. Although final tallies from the Central Election Commission (CEC) are still pending, preliminary results indicate that the recall campaigns against all seven KMT lawmakers have fallen short. As of 6:10 pm, Taichung Legislators Yen Kuan-heng (顏寬恒) and Yang Chiung-ying (楊瓊瓔), Hsinchu County Legislator Lin Szu-ming (林思銘), Nantou County Legislator Ma Wen-chun (馬文君) and New Taipei City Legislator Lo Ming-tsai (羅明才) had all announced they
Nvidia Corp CEO Jensen Huang (黃仁勳) yesterday visited Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), as the chipmaker prepares for volume production of Nvidia’s next-generation artificial intelligence (AI) chips. It was Huang’s third trip to Taiwan this year, indicating that Nvidia’s supply chain is deeply connected to Taiwan. Its partners also include packager Siliconware Precision Industries Co (矽品精密) and server makers Hon Hai Precision Industry Co (鴻海精密) and Quanta Computer Inc (廣達). “My main purpose is to visit TSMC,” Huang said yesterday. “As you know, we have next-generation architecture called Rubin. Rubin is very advanced. We have now taped out six brand new
POWER PLANT POLL: The TPP said the number of ‘yes’ votes showed that the energy policy should be corrected, and the KMT said the result was a win for the people’s voice The government does not rule out advanced nuclear energy generation if it meets the government’s three prerequisites, President William Lai (賴清德) said last night after the number of votes in favor of restarting a nuclear power plant outnumbered the “no” votes in a referendum yesterday. The referendum failed to pass, despite getting more “yes” votes, as the Referendum Act (公民投票法) states that the vote would only pass if the votes in favor account for more than one-fourth of the total number of eligible voters and outnumber the opposing votes. Yesterday’s referendum question was: “Do you agree that the Ma-anshan Nuclear Power Plant
RSS