Where is the Dow & others heading in 2005?

[Racer]

If the takeover fails and is just a rumour then DAX should fall



May 27 (Bloomberg) -- UniCredito Italiano SpA, Italy's second-largest bank by assets, may buy Germany's HVB Group in what would be Europe's biggest-ever cross-border banking takeover, said people familiar with the situation.

The companies haven't yet agreed on a price, said the people, who declined to be identified. Milan-based UniCredito may offer 16 billion euros ($20 billion) in stock for HVB, Germany's second-largest bank, the Wall Street Journal said earlier today.

Buying Munich-based HVB would give UniCredito, led by Chief Executive Officer Alessandro Profumo, 10 million customers in eastern Europe, where the bank is trying to expand. HVB owns Bank Austria Creditanstalt AG, which operates in 11 countries, including Poland, Bulgaria and Hungary.

``Bank Austria is what UniCredito really wants to get hold of,'' said Giovanni Vietti, who oversees $1 billion at Milan- based RAS Asset Management, whose parent Riunione Adriatica di Sicurta SpA owns 4.9 percent of UniCredito. ``There would be many synergies in eastern Europe, a lot more than there usually are in cross-border mergers.''

HVB spokesman Martin Roth declined to comment, as did a spokesman for UniCredito, who asked not to be identified.

 

[rrtech]

If consumer sentiment data (out at 2:45 UK time) does not rise today, this could be a big downtrend day of 100 points plus. Also the oil price needs watching as it has been creeping up.

 

[kriesau]

If the takeover fails and is just a rumour then DAX should fall



May 27 (Bloomberg) -- UniCredito Italiano SpA, Italy's second-largest bank by assets, may buy Germany's HVB Group in what would be Europe's biggest-ever cross-border banking takeover, said people familiar with the situation.

The companies haven't yet agreed on a price, said the people, who declined to be identified. Milan-based UniCredito may offer 16 billion euros ($20 billion) in stock for HVB, Germany's second-largest bank, the Wall Street Journal said earlier today.

Buying Munich-based HVB would give UniCredito, led by Chief Executive Officer Alessandro Profumo, 10 million customers in eastern Europe, where the bank is trying to expand. HVB owns Bank Austria Creditanstalt AG, which operates in 11 countries, including Poland, Bulgaria and Hungary.

``Bank Austria is what UniCredito really wants to get hold of,'' said Giovanni Vietti, who oversees $1 billion at Milan- based RAS Asset Management, whose parent Riunione Adriatica di Sicurta SpA owns 4.9 percent of UniCredito. ``There would be many synergies in eastern Europe, a lot more than there usually are in cross-border mergers.''

HVB spokesman Martin Roth declined to comment, as did a spokesman for UniCredito, who asked not to be identified.

The FTSE, CAC, AEX, BFX, MIBTEL & SMSI are all down in the range 0.3% - 0.5% this morning with the DAX still holding flat around last nights close.

If the French vote 'Non' to the EU Constitution on Sunday (which looks increasingly likely) then we could have some fall out next week in the European bourses (other than the FTSE) as a result, since this will probably affect credibility, stability and the Euro.

 

[roguetrader]

If the French vote 'Non' to the EU Constitution on Sunday (which looks increasingly likely) then we could have some fall out next week in the European bourses (other than the FTSE) as a result, since this will probably affect credibility, stability and the Euro.

This has the potential to be very interesting, and seems to be getting little press, which leaves me wondering just how far reaching a negative vote by the French would be. In particular concerning the Euro. I know for example the Italians have been expessing dis-satisfaction with the euro and talk though muted of ressurecting the Lira.

 

[kriesau]

This has the potential to be very interesting, and seems to be getting little press, which leaves me wondering just how far reaching a negative vote by the French would be. In particular concerning the Euro. I know for example the Italians have been expessing dis-satisfaction with the euro and talk though muted of ressurecting the Lira.

One can understand the Germans yearning for the D Mark or even the French being nostalgic about the Franc but the Lira !!!!!............reverting back from the Euro to the Lira would be a bit like trading in your boring and staid Ford Mondeo for a rusty and unreliable old Cortina

 

[roguetrader]

Now now kriesau, one could always count on being a millionare whilst on holiday in Italy.
But seriously, I wonder how nervous all this bickering makes the holders of the euro. The euro has begun to be looked at as an alternative safe currency to the dollar, any unsettling of that could cause a flight back to the dollar, which in turn would start to make those twin deficits more significant.

 

[LION63]

Kriesau,

When the Italians had their own currency they were very competitive in the World Markets because they were able to devalue whenever they felt the need. Sadly that option is no longer available and there are those that would bring it back. It is no longer a case of if but when the Euro will implode. German and French unemployment already exceeds 10% and is on the rise.

As I stated a few days ago, the markets have sought to ignore a No vote in France and Holland but by Monday they will have to live with it and the ramifications - a falling Euro; lower European stocks; political stagnation and imported inflation. What steps will be taken to rectify the situation? None, the Europeans have never acted when the needs have arisen, instead they dawdle and bury their heads in the sand. Woe betide them if the Chinese revalue the Reminbi in the next two months (very likely).

 

[roguetrader]

I found this an interesting read with a view to the long sought Chinese re-valuation.

http://www.marketwatch.com/news/story.asp?guid={2E5B3E4E-0920-4EC4-9796-D6DF3021E3EB}&siteid=mktw

 

[rrtech]

Does anyone know where I can find past US economic data releases. It would be really useful if the analysts estimates were there as well. Thanks.

 

[kriesau]

Kriesau,

When the Italians had their own currency they were very competitive in the World Markets because they were able to devalue whenever they felt the need. Sadly that option is no longer available and there are those that would bring it back. It is no longer a case of if but when the Euro will implode. German and French unemployment already exceeds 10% and is on the rise.

As I stated a few days ago, the markets have sought to ignore a No vote in France and Holland but by Monday they will have to live with it and the ramifications - a falling Euro; lower European stocks; political stagnation and imported inflation. What steps will be taken to rectify the situation? None, the Europeans have never acted when the needs have arisen, instead they dawdle and bury their heads in the sand. Woe betide them if the Chinese revalue the Reminbi in the next two months (very likely).

In a way a French No vote might be the worst result since this will almost certainly prompt a 'fudge' with concessions to woo the French public to approve an amended version the second time around. More importantly it will get the Labour government off the hook on a referendum here since they can hardly hold a vote on a constitution that has already been rejected by the French.

I'm not anti-Europe but I'm totally anti-EU in its current guise - an unelected, corrupt, nannying bureacracy which seeks to impose the out of date and uncompetitive social & economic structures, that have evolved in Germany and France, accross Europe. We have a runaway train which is heading out of control in a disasterous fashion.

We need a crisis to put the brakes on and that would more effectively result from a clear and unequivocal British No vote, which can't be fudged, than a temperamental rejection from the French which ultimately will be.

 

[kriesau]

US Futures edging up close to the open.

 

[LION63]

That is a good article RogueTrader and thank you for posting the link.

The bears know that there is no cloud with a silver lining on the horizon, it is a case of how soon and how severe the pain will be. Europe and the UK will also suffer severely as the aftershocks are felt in most financial markets. All those lumps that keep piling into those buyout funds will find that they are left without chairs when the music stops. Those carry trades will be unwound with speed and as many economists have predicted the FED will be forced to CUT rates on order to stave off a depression.

 

[roguetrader]

Does anyone know where I can find past US economic data releases. It would be really useful if the analysts estimates were there as well. Thanks.

http://biz.yahoo.com/c/e.html

Not sure how far it goes back ya just have to keep clicking on "last week"

 

[LION63]

For those of you that use charts, may I suggest that you overlay the Nikkei and the S&P over a 15 year period, it does not make for happy viewing.

 

[kriesau]

For those of you that use charts, may I suggest that you overlay the Nikkei and the S&P over a 15 year period, it does not make for happy viewing.

Lion, not quite sure what point you're making !

The Nikkei has dropped by 67%, from 33K to 11K, whilst the SPX has risen by around 350%, from 330 to 1200, over that period. Are you suggesting that you believe the main US markets could replicate the Nikkei going forward ?

 

[LION63]

You are spot on Kriesau. You will note that the patterns are very similar, the rebound in the S&P from the lows of 2000 mirror the failed rallies of the Nikkei in the early years albeit with slight lags. That is why there are many that say we are not in a bull phase/market merely a rally in an overall bear market that has a few more years to run.

 

[roguetrader]

Volume light, running at 15 -16 % behind yesterdays pace, internals mixed, if you're trading intraday watch out for the chop.

 

[kriesau]

You are spot on Kriesau. You will note that the patterns are very similar, the rebound in the S&P from the lows of 2000 mirror the failed rallies of the Nikkei in the early years albeit with slight lags. That is why there are many that say we are not in a bull phase/market merely a rally in an overall bear market that has a few more years to run.

There are several commentators who espouse the view that the Bull market ended when the SPX topped out at 1550 in March 2000 and that we've been in a secular Bear market since then, punctuated by a cyclical Bull rally which commenced in March 2003. The SPX declined by nearly 50% between March 200 and March 2003 (1550 to 800) and has subsequently increased by 50% since March 2003 (800 to 1200).

If this view is correct then the real issue is - did we see the top of this cyclical Bull at 1229 on March 7th this year ?

 

[kriesau]

Pretty flat so far today with the Dow, NDX and SPX all hanging just under last nights close. SPX is down 1% and thr BKX is flat. Oil creeping back up toward $51.50.

Dow has 20 decliners and 10 risers, the latter amazingly led by AIG who are up nearly 2%. Never thought a law suit alleging serious accounting irregularities was a development that would drive a stock up nearly 2% !

 

[kriesau]

Apologies - For 'SPX is down 1%' read SOXX !

Anyone short yet on the Dow today ?