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07.12.2007 - Stock Markets Weekly Brief - Another week in good moods

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Date: 2007-12-07 15:15

Another wave of positive sentiment this week means that there is a good chance for the December to be finished in green colours. Even though payrolls were weaker than the ADP report (released on Wednesday), and the Paulson plan may not be such a miracle, overall picture is slightly positive. This proved enough for investors to accumulate stocks puling main indices beyond the half way between November’s lows and October’s peaks. Investors slowly tend to believe that the worst of the subprime meltdown is behind and that the economic growth worldwide will not be that sluggish after all.


This increases risk appetite, which is reflected not only in the US shares but also in the value of the dollar and rising prices in emerging markets. In the latter case we observed not only rising stock prices but also appreciating currencies, leading to increased profits for foreign investors. This was the case also in the Central Europe. Over the last week main indices in Warsaw and Prague gained more than 3%. Additionally, the Polish zloty continued its strong appreciation, especially against the euro.

In the week to come, we are going to face the Fed meeting (on Tuesday evening) and it will decide if we are about to stay in good moods until the Christmas. There are no crucial data releases before the meeting, however, there will be a set of the US inflation data as well as trade balance afterwards.   


Przemysław Kwiecień