Turning into a bumpy ride (ISFM) (18-01-2011)

World stocks were gaining today with many of them reaching multi-month highs and the euro advanced as hope grew that the euro zone debt crisis might ease. With the US markets closed yesterday for a holiday, it will be interesting to see how they react today to the disappointing earnings from Citi and to the news that Apple is once again without Steve Jobs, who is on leave for health reasons

Earlier in Asia, most markets ended higher as a strong outlook for nonferrous and precious metals pushed several stocks in the sector upwards, while hopes for better semiconductor memory prices sent chipmakers’ shares up. Those gains helped regional stocks end on a mostly positive note, offsetting weakness in a number of steel makers on concerns about their earnings.

Euro zone leaders were trying to find common ground with regard to a rescue plan for indebted countries although this was not forthcoming in yesterday’s meeting. Investors may wish for an increase in the EFSF to 700 billion, but the EU ministers are not likely to come up with a new package any time soon. Among interested parties, Russia seems willing to buy bonds from the European Financial Stability Facility (EFSF). The euro rose more than half a percent to $1.3376.

As trading began on Wall Street, indices diverged, with the Dow starting higher and NASDAQ and S&P falling, while Citigroup and Apple plunged as investors sentiment was clearly affected by their respective news.

Source: ISFM