GLOBAL RED TSUNAMI HEADED FOR JSE (8.450am) 08 JUNE 2007

Ouch this might hurt the JSE overall. if anybody is riding the waves as a alternative investment, do so carefully. all share 0.90% down from yesterdays close, if the market follows the same patterns as the last few weeks we might see it recovering again in a day or to. is it just me or does the market always seem to be a bit down on Fridays, I know traditionally institutions take their profits on Fridays, hence maybe the best day to buy. otherwise SIM is also up another 1.2%. I wish I had capital, I wish I had capital.

btw, thanks to those of you clicking on the sponsored links. I am considering donating half my advertising earnings to charity or investing it with the largest persentage of returns gonging to a charity i South Africa.

at 10:15

source (www.psg-online.co.za)

New York

Stocks tumbled for a 3rd straight day on Thursday as surging Treasury yields, higher mortgage rates and hawkish comments from bond guru Bill Gross exacerbated bets on Wall Street that the Federal Reserve may have to raise interest rates later this year. The Dow Jones industrial average tumbled nearly 200 points, or 1.48%, bringing its 3-day loss to 413 points, or about 3%. The broader S&P 500 index sank nearly 1.8%, or 3.2% for the 3-day period. The tech-driven NASDAQ composite index plunged 1.77% on Thursday and has lost roughly 3% for the 3 days. The Russell 2000 small-cap index plunged 1.9% on Thursday and lost 3.5% for the 3 days. “This is the summer correction everyone’s been looking for,” said Tim Hartzell, CIO, Kanaly Trust Company. He was referring to expectations on Wall Street that the rally was due for a bit of a pullback – and the seasonal tendency for summer to bring sub-par stock returns, due to low trading volume and more volatility. Hartzell said the rally ha!
d been vulnerable to this kind of a retreat in mid-May, but then got recharged by “the speeding car that is private equity.” He said that after the summer, he still expects to see the classic 4th-quarter stock market run-up. After scratching out modest gains on Monday, stocks fell sharply on Tuesday, Wednesday and Thursday as investors bet that interest rates are set to rise, before they fall. Sparking the bets were cautious comments from Federal Reserve officials, signs of rising inflation and surging borrowing costs both at home and abroad. PIMCO’s Bill Gross added fuel to the fire late Thursday when he said that the bond market is entering a bear market. “Based on the last employment report and other recent economic info, it’s clear that we are not getting an interest rate cut anytime soon,” said Charles White, chief strategist at ThomasLloyd Global Asset Management. “We’ve got crude up at probably $70/barrel in a few months and we saw a big technical support in the 10-y!
ear note yield give way today.” White said that all these factors were
dragging on stocks on Thursday and could leave the S&P 500 ultimately down more than 5% from its recent high by the time the losses dry up. However, he said he would be surprised if the sell-off proved to be more than that. That’s partly because the declines were not unexpected considering the recent run-up that sent the Dow, S&P 500 and Russell 2000 to all-time highs, and the NASDAQ to a 6-year high.ad_channel =

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Since tumbling in late February and early March on worries about slower global growth, stocks have been on the rise, thanks to better than expected earnings, corporate deals and stock buyback plans. Those developments remain in place and are likely to keep a floor on any stock sell-off in the weeks ahead. “If you’re a bear, you don’t have a whole lot of ammo,” White said. “LBO’s and stock buybacks go on. There’s ample money out there. From a supply and demand standpoint, there’s still support for US equities.” Treasury prices slumped on bets that the Federal Reserve is more likely to boost rates before cutting them. In addition, bond investors were reacting to a jump in mortgage rates to a 10-month high. The slide boosted the yield on the benchmark 10-year note to 5.13% from 4.96% late on Wednesday, making Thursday the 1st day the 10-year note has surpassed 5%, a key psychological level, since last summer. The yield briefly hit 5.14%, an 11-month high. Bond prices and yields!
move in opposite directions. The run up in bond yields both raises rate hike worries and the threat of bonds becoming a more competitive investment than stocks. In currency trading, the Dollar rose versus the Euro and the Yen. US light crude oil for July delivery jumped 97 cents to settle at $66.93/barrel on the New York Mercantile Exchange over concerns about exports from the Middle East after Turkish troops raided Iraq. COMEX gold for July delivery fell $9.40 to settle at $665.20 an ounce, falling with other Dollar-traded commodities. In economic news, April wholesale inventories rose 0.3%, as expected, after climbing 0.4% the previous month. Market breadth was negative. On the New York Stock Exchange, losers beat winners by 11 to 1 on volume of 1.91-bn shares. On the NASDAQ, decliners topped advancers by nearly 4 to 1 on volume of 2.38-bn shares. Stock declines were broad based, with all 30 Dow stocks sliding. Rate-sensitive stocks continued to slump for the 3rd session!
, with the Dow Jones Utilities average losing 3.3%. Homebuilders slump
ed on the rise in interest rates and in response to a warning that 2007 results won’t meet estimates due to weaker than expected April and May sales. Stock investors also perused a variety of May sales reports from the nation’s retail chains. In general, sales rebounded modestly from April’s weakness, thanks to warmer weather and early summer discounts. But spiking gas prices took a chunk out of any recovery.

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