Wednesday, October 5, 2011

Morning Call Topic - Market Nears Bear Territory

Market Nears Bear Territory

U.S. Stocks Down Almost 17% Since April High on Europe, Economic Concerns


Q1. "Monday's declines cap a two-month period of frayed nerves and damaged confidence in the investment community. On the New York Stock Exchange, 837 stocks hit 52-week lows, as did 643 stocks on the Nasdaq Stock Market."
What caused such a deep and broad decline in the markets on Monday?

Q2. But why did stocks finish with surprise bounce on Tuesday? Or say what was the story that made the markets come surging back? Any comments/opinions regarding the drama in the market on Tuesday? (We know the story behinds, but I am expecting your opinions and discussions.)

Q3. FT news: "EU leaders are actively looking for ways recapitalize European banks in a coordinated plan".
Even though markets bounced back because of the news, however, the details of any plan to recapitalize the banks are unknown. In fact, any coordinated measure need approval from national governments, something that the finance ministers meeting today can't promise. Considering the immaturity of any plans to actually go ahead and recapitalize the banks, do you think if the market is overblown? Why? or Why not? Do you think if the news will become just one of rumors about an eurozone solution flying around over the last few weeks? Any projections regarding the markets?

Q4. What is the bear-market territory? And bull-market territory? Do you think if the bear-market territory will be hit sooner or later (within a few months)? Why?

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