Pause for thought (ISFM) (09-03-2010)

Anniversary lows were remembered with mostly losses in today’s sessions as Asian markets finished mixed and their European counterparts fell on disappointing earnings from plane maker EADS as equity investors paused for a longer look at the pace of the global economic recovery after the stronger U.S. jobs reports and the debt crisis in Greece.

In Asia, investors were treading carefully, eyeing key reports on the region's two biggest economies, China and Japan, which are expected tomorrow; they are hoping that Chinese trade data might give them a better sense of how the Chinese government is planning to withdraw its supportive measures. Also expected, is a report on Japanese machinery orders, which may provide more insight into the state of global trade and the world's second-largest economy. Therefore, Asian indexes were little changed, with Tokyo closing down but Chinese benchmarks edging up.

Oil prices tumbled falling below $81 a barrel, after rising for one month, while among currencies the dollar was lower at 89.85 yen from 90.28 yen and the euro weakened to $1.3565 from $1.3631.

In Europe, it was mostly the earnings reports that mostly disappointed investors. Aerospace company EADS NV reported that sharply rising costs on its military transport plane and its A380 superjumbo led to losses in the fourth quarter and full year, which put pressure on its share, causing it to drop sharply.

Also under pressure were financial shares after Moody's credit ratings agency said the withdrawal of stimulus measures would leave some banks in Britain fragile. Greek Prime Minister George Papandreou was due to meet President Barack Obama later Tuesday to discuss stricter regulations on hedge funds and currency traders that Athens believes aggravated their crisis.

Back in the U.S., stocks on Wall Street were fluctuating upon the open, one year after the recession’s lows. There is very little expected in macro or micro economics data, so it seems that investors are pausing trying to gauge what the next step will be.

Source: ISFM