How was the first week of trading?

We supply a thumbnail of the markets at the end of the first week of 2009.

International Markets

The US saw a negative start to the year with the Dow Jones down just under 3% on Friday morning. Tuesday saw ADP Employment change down 693 000, some 200 000 fewer jobs than expected. Poor Q4 earnings from Walmart and Abercrombie came out lower than estimates had suggested, prior to Thursdays spot market open.

2009 looks set to continue being gloomy with job losses mounting globally and interest rates falling with the UK cutting, once again on Thursday, by a further 50bps. However, banks have stated that the lower interest rates will not be passed onto customers, nullifying some of the effect that the cuts are supposed to have in stimulating the economy.

Crude oil took a big hit this week, as the falling equity markets added to the Department Of Energy figures, suggesting that stockpiles of crude rose dramatically last week and adding downward pressure on the black gold. We expect the outlook for oil to be poor for at least the first quarter of the year and quite possibly longer.

Gold is also down on the back of a stronger USD. Platinum, surprisingly, is up around 10% on the back of increased demand from India, renewing supply concerns due to the lower prices that have been traded over the previous six months.

Souh African Markets

With the first full week of trading for the New Year, the ALSI Front Month Future ended relatively flat to Thursdays close at 20,293. The first half of the week saw some good gains, taking much direction from international markets. Many people continued to focus on the developing plans from President-elect Barack Obama regarding the stimulus package, speculating that the US economy may recover this year.

Platinum and energy stocks were also under focus with good gains in the underlying commodities pushing producers higher. Gold producers were the worst performers this week as gold came under pressure amid a stronger dollar.

[based on a Global Trader report]