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HEXUS.sharewatch: Europe crisis reaches moment of truth

by Scott Bicheno on 26 September 2011, 12:50

Tags: Apple (NASDAQ:AAPL), Intel (NASDAQ:INTC)

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Even in the context of the extended macroeconomic turmoil the world has had to endure for the past few years the equity markets have been a roller-coaster recently.

Last week all our stocks were up as investors apparently decided things weren't as bad as they feared. However we said we wouldn't be surprised to see a Newtonian recoil this week, and that's exactly what we got.

The strongest specific reason for this reversal of investor sentiment seems to have been the decision by the Fed not to embark on a third round of quantitative easing (QE3), and opt for some much milder repackaging of debt, which is being called Operation Twist.

But the broader underlying reason for the fall was, once more, European sovereign debt. The latest cunning plan for resolving the situation seems to have been urged upon Europe by US Treasury Secretary Tim Geithner, which involves massively enlarging the EU bail-out fund, in order to provide support for banks when Greece defaults, as is surely inevitable.

Among our stocks only two - Apple and Intel - survived the carnage up on the week, with investors seeing them as relatively safe bets. AMD fared especially badly, thanks in part to the loss of their product head. Nokia didn't seem to do anything specific to warrant its fall and, with its Windows handset launch surely not far away now, may represent a risk worth taking.

 

Company Listing Share price 5/9/11 Share price 12/9/11 Share price 19/9/11 Share price 26/9/11 7-day change Market cap (bn)
AMD AMD 6.32 6.52 7.20 6.17 -14.3% 4.27
Apple AAPL 374.05 377.48 400.50 404.30 0.9% 374.82
ARM ARMH 26.79 27.46 28.21 26.91 -4.6% 12.08
Avnet AVT 24.95 24.85 27.94 26.18 -6.3% 3.98
Cisco CSCO 15.41 15.82 16.62 15.61 -6.1% 84.03
Dell DELL 14.24 13.97 15.20 14.40 -5.3% 26.27
Google GOOG 524.84 524.85 546.68 525.51 -3.9% 169.68
HP HPQ 24.34 22.65 23.53 22.32 -5.1% 44.35
IBM IBM 166.98 161.37 172.99 169.34 -2.1% 202.24
Intel INTC 19.64 19.70 21.97 22.16 0.9% 116.36
Microsoft MSFT 25.80 25.74 27.12 25.06 -7.6% 209.96
Nokia NOK 6.34 5.98 6.03 5.24 -13.1% 19.91
Nvidia NVDA 12.92 13.88 15.46 13.79 -10.8% 8.33
Oracle ORCL 26.97 26.00 29.23 28.90 -1.1% 146.20
Qualcomm QCOM 49.68 50.40 53.87 50.29 -6.6% 84.47
Sony SNE 20.73 19.63 20.50 19.02 -7.2% 19.09
Vodafone VOD 26.32 25.77 26.13 25.08 -4.0% 127.54
Dow .DJI 11240.26 10992.13 11509.09 10771.48 -6.4% N/A
FTSE 100 .FTSE 5292.03 5214.65 5368.41 5066.81 -5.6% N/A
NASDAQ .IXIC 2480.33 2467.99 2622.31 2483.23 -5.3% N/A


HEXUS Forums :: 1 Comment

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There do seem to be two hissy fits going on with the markets right now, in Europe, now its excepted that half the Greek debt has been wiped off, and a fair bit set asside to inject if needed in to Spain and Italy solutions, the futures market appeared happy last night, we've only just reached the same high it hit!

But the EU area stocks were hit a LOT harder than the US ones.

In the US it was more a case of the market has assumed QE was the awnser, flattening the yield didn't seem to go down well, but didn't cause the ****stink we had in London over greece…