Thursday, January 7, 2010, 4:56AM ET - U.S. Markets open in 4 hours and 34 minutes.
- Home
- Tech Industries
- Topics
- Reporters
- Subscribe
Black Friday? Complex and Amazingly Strong Forces at Work
Posted Oct 24, 2008 09:52am EDT by Aaron Task in Investing, Commodities, RecessionFriday is shaping up to be a historic day, as major markets plummeted across the world and U.S. futures were halted after hitting "limit down" levels.
"The forces at work this morning are complex and amazingly strong," writes Art Cashin, head of floor operations at UBS. "It could be a selloff on the order of 1000 to 2000 points on the Dow [but] a sudden reversal is always possible."
Cashin, among others, has been warning about the possibility of a retest of the market's October 2002 lows of Dow 7300 and S&P 768. The recent lows of Dow 7774 and S&P 840 are the first levels of "support" traders are watching.
Among the high-, umm, low-lights of what is shaping up to be a very Black Friday:
- Japan's Nikkei tumbled 9.6% to its lowest level since Spring 2003 following Sony's warning and amid general fears of a global recession. Major markets in Hong Kong and South Korea also plunged.
- European markets plummeted after the U.K. said economic activity contracted by 0.5% in the third quarter and Daimler essentially withdrew is guidance for the coming year. The British pound suffered its worst decline since 1971.
- Russia's Micex tumbled 14% a day after S&P cut the country's credit outlook to negative from stable. Regulators suspended trading and don't plan to reopen until Tuesday.
- Credit market indicators such as Libor, which had been improving in recent days, reversed course and rose again as banks remain very wary to lend, even (or especially) to other banks.
- Commodities plunged: Oil slid below $63 per barrel as OPEC's production cut failed to allay concerns about demand destruction. Gold fell sharply as the dollar rallied vs. European currencies, although the greenback was weak vs. the yen.
The strength in the yen reflects an unwinding of so-called carry trades; bets made by speculators using borrowed yen. The carry trade was used to finance bets on assets worldwide of varying types along the risk curve. Now, those bets are being unwound as capital seeks a refuge, which is why the yen and Treasuries are about the only assets rising right now.
As trading gets underway, some players are noting the levels that trigger the NYSE's circuit breakers, which halt or suspend trading depending on the time of day and magnitude of the decline. Details here.
190 Comments
Yahoo! Finance User - Friday October 24, 2008 10:10AM EDT
Worthless derivatives need to wash out. Every one loses. The fed needs a reality check.
__A_YAHOO_USER__ - Friday October 24, 2008 10:12AM EDT
Black friday or not the bear is too greedy to kill all the bulls......One thing is ure,once he is full up she will sleep........Happy Bear to eager to kill..............The Bull became antique and few one thing is sure Antique became expensive in the future ........Happy Bear when will sleep........When it sleep the bull will eat plenty grass.....No pain no gain......Now all the feel is pain...pain,,,,pain........Once the pain is gone the bull will enure the pain.......Those who will endure will be save....
Gina - Friday October 24, 2008 10:15AM EDT
Dont listen to Blodgett...what a crook...research his shady background and the indictments against him
Steve - Friday October 24, 2008 10:15AM EDT
Can someone say, nobody has a clue what is going on in the markets? With the Plunge Protection team manipulating things, the ups should be downs, and visa versa. What a mess. Pucker up folks, this ride is just getting started.
lazlo - Friday October 24, 2008 10:15AM EDT
...so who are you ... you know ... the guy who shut down my pc cos i dared to mention all you investors are gamblers ...
Yahoo! Finance User - Friday October 24, 2008 10:16AM EDT
It's like a roller coaster.....and there may be some see-sawing......but, mostly it's going to be downhill. Put your hands in the air and scream...........................WEEEEEEEEE
Mike A - Friday October 24, 2008 10:16AM EDT
BELIEVE ME IF THE MARKET CRASHES YOUR GOING TO SEE TOTAL KAOS IN THIS COUNTRY 10 TIMES OF 1929 I PRAY TO GOD THIS DOSNT HAPPEN
Daniel - Friday October 24, 2008 10:19AM EDT
I'm with you "abstract dreamer". Talking heads = useless information after the fact. Don't watch the news...it's too late to act period.
Yahoo! Finance User - Friday October 24, 2008 10:20AM EDT
Who would have thought that a pebble thrown into a pond could create a tsunami. In retrospective, it could have all been defused if the government had only paid the part of the mortgage that homeowners couldn't afford to pay until they could be refinanced or sold. Had they done that, the housing market wouldn't have been flooding with foreclosures, home prices wouldn't plummeted, Bear Stearns and Lehman Brothers would still be here because the CDSs wouldn't have kicked it. There's a high probability that the economy would be business as usual. As long as it was a recession of the middle class and poor, the government was contend to treat the symptoms but let the patient die. There were two bills introduced to keep people in there homes but they were killed. It was only until the people began to affect the constituents that they do care about, the wealthy, that the government stepped it. I don't see how it would have cost the government more than a billion to pay the subprime house notes until those people could be relocated or refinanced. That would have been a simple, quick and very cheap solution instead of trying to fix an imploding financial system but that would never happen under Team Bush. If you thought if was fantastic that the market crashed his first year in office, then you'll love this. It's Bush's encore. A parting gift to the American taxpayer, a gift that will keep on giving for generations.
Chris - Friday October 24, 2008 10:21AM EDT
Nothing like a little gallows humor to get things started. It is going to be a "hell of a day".
Yahoo! Finance User - Friday October 24, 2008 10:21AM EDT
Art Cashin said a 2000 sell off is possible and then maybe a sharp reversal. He is constantly negative . CNBC is the negative news station. They don't just report they pound away at the negative all day, every day.
Alan - Friday October 24, 2008 10:22AM EDT
The buyers are the people with big money, who don't care if it drops to 5000 - they'll keep buying and when we're all said and done the elite 1% will own more of the world than ever before!!
Dan C - Friday October 24, 2008 10:22AM EDT
Oh My God!!!!!!! Whats Happening Grab any money yu can get and put in a jar.
Sean H - Friday October 24, 2008 10:23AM EDT
Opening 500 down will scare people not so far fetched now is it. Analysis based off of japans drop, and mind you Japans financial secter is not in the same trouble that the US one is.
Want to post a comment? Sign in now to begin.
Recent Posts
Most Recommended
Copyright/IP Policy - Terms of Service - Privacy Policy - Help
Quotes delayed, except where indicated otherwise. Delay times are 15 mins for NASDAQ, NYSE and Amex. See also delay times for other exchanges.
Quotes and other information supplied by independent providers identified on the Yahoo! Finance partner page. Quotes are updated automatically, but will be turned off after 25 minutes of inactivity. Quotes are delayed at least 15 minutes for NASDAQ, NYSE and Amex. See also delay times for other exchanges. Real-Time continuous streaming quotes are available through our premium service. You may turn streaming quotes on or off. Fundamental company data provided by Capital IQ. Financials data provided by Edgar Online. Historical chart data and daily updates provided by Commodity Systems, Inc. (CSI). International historical chart data, daily updates, fund summary, fund performance, dividend data and Morningstar Index data provided by Morningstar, Inc. Analyst estimates data provided by Thomson Financial Network. All data provided by Thomson Financial Network is based solely upon research information provided by third party analysts. Yahoo! has not reviewed, and in no way endorses the validity of such data. Yahoo! and ThomsonFN shall not be liable for any actions taken in reliance thereon. All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.
- Friday October 24, 2008 10:09AM EDT
1000 to 2000 dow drop in a day? why not 5000 while she is at it? why do you invite people that make no analysis? and just give their (crazy) opinions like they were well founded? I am going to stop watching this useless videos...