What Japan Must Do With The Dollar Weakening
This piece was
written by Greg Che.
Markets opened lower Friday in the
midst of more earnings warnings and the continued weakness of the U.S. dollar.
The weakening dollar is causing some
other issues to arise in the European and Japanese economic arena. With regard to Europe,
the descent of the dollar is causing a deflation in that region which will put
some weight on the European Central Bank to initiate a reflation program should
the decline continue.
With respect to Japan, this is the
last thing the country needs…a stronger yen. Japan cannot afford to have the
exchange rate continue its upward movement due to the weak economic climate in
the country. Japan is cognizant of the situation and has taken steps in
the direction of monetary easing, but not to the extent the global economy
needs. Until then, the Japanese markets will remain very vulnerable.
Once again the markets received
another positive economic number, the University of Michigan Sentiment figures
increased from 92.4 to 93.5. However, with the lousy numbers from Ford Motor
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and the decision from the federal appeals court not to grant Microsoft
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a delay in their case, the good news was muted. Ford is trading down 1.84 while MSFT is lower 1.90 at 62.72.
Breadth thus far for the session is
negative with decliners outpacing advancers on the NYSE by a ratio of 18 to 10.
On a double-witching Friday, the
broader market indexes are trading lower. The Nasdaq Composite is lower 51.70 at
1878.62, the Dow Jones Industrials are down 132.99 at 10259.81, and the S&P 500
Index is trading at 1163.11 losing 18.55.
Stocks moving higher in this session
are ACLN Limited
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ASW |
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Kohls Corp.
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gained 2.04 after being upgraded by Prudential Securities from Hold to Buy.
Group 1 Automotive
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scooting higher 1.66.
Newspaper giant New York Times
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is scaling higher nicely and is trading at 1.29.
Leeds Federal Bankshares
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is up 15.35 on news that Northwest Bancorp
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company for approximately $44 million.
Advance PCS
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ascent higher after trading out of a multi-week trading range. It is up 3.09.
Also on the Nasdaq, Thoratec
Corporation
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Lower in the trading session is Americredit
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ACF |
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Car maker Daimler Chrysler
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is down 3.49 after getting caught in the downdraft of the report that Standard
& Poor’s warned it may cut the long- and short-term credit rating on Ford
Motor
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Magna International
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MGA |
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sliding lower 2.69.
Among the Nasdaq losers, Astropower
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APWR |
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Chip maker Broadcom’s
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shares are losing ground, down 3.29.
And Microsemi
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2.86.
Moving higher at midday in the sector
watch is the Gold and Silver Index
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Sectors leading in the red are the
Semiconductor Index
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and the Airline Index
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$XAL.X |
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PowerRating).