The Dow Jones Industrial Average (DJIA) continued its remarkably strong rally this week to finish just shy of 13,000 at 12,949.87. The S&P 500 market index ended the week up 1.38% at 1,361.23 thanks in part to large gains in the energy sector. The CBOE volatility index finished the week just below 18, indicating that investors are starting to regain confidence in the stability of global markets.
Hedge fund managers across the globe have been turning significantly more bullish on bets in equities and the international credit market. Many of these investors are basing their strategies on the belief that the European Central Banks long-term refinancing operations which commenced in December and are continuing this month will be successful in propping up struggling European banks.
Oil and gas, chemicals, and basic resources were the biggest gainers this week in terms of market sectors. Gigantic deals such as the recently announced merger between Xstrata (XTA) and Glencore (GLEN), two of the worlds leaders in natural resources, have been steadily driving stock prices skyward. Gasoline prices are now approaching record levels for the season as crude oil futures for March delivery climbed to finish the week at over $104.
European shares ended the week on a good note on the back of speculation that Greeces leaders would reach an agreement on a second bailout by today in order to avoid a disorderly default. Unfortunately, Angela Merkel sustained an embarrassing blow a midst the forced resignation of German president Christian Wulff over a political favors scandal. Merkel, along with French president Nicholas Sarkozy, are widely perceived by investors to be the most important political players in keeping the euro zone solvent. The markets ultimately ended up in part because of the traditional investor optimism that accompanies three-day holiday weekends. Stock markets were closed today in the US in observance of Presidents Day.
--
Editorial Staff
No comments:
Post a Comment