Good Afternoon ,
The Iseq index took its cue form Cheltenham this afternoon after basically ignoring the strong European and UK markets for most of the morning., The rally in Ireland co-incided witht the start of the first race in Cheltenham . The Dow Jones Industrial Average was higher by about 261 points. Gains were paced by shares of Citigroup which jumped 28% as the beleaguered giant said it was profitable during the first two months of the year, defying forecasts of losses. The news from an email distributed by Citi CEO sparked life in the US financials sector. Elsewhere in the US the Oil price rallied towards $50 per bbl and resources and materials stocks also rallied sharply. THe tech sector also recorded a sharp rally after the recent steep falls.
Ben Bernanke the FED chairman also managed to give some comfort to the market which has taken most of his recent pronouncements badly. Today he said that said it was important to address the valuation of illiquid assets. He said that he wouldn't support suspension of "mark to market" rules. The Fed chairman also signaled it isn't too early to consider longer-term reforms including putting responsibility for addressing possible systemic risks with one authority, Gold futures fell to around $900. The dollar declined against the yen and the euro.
In Ireland the Central Bank head John Hurley addressed the joint Joint Oireachtas Committee on Economic Regulatory affairs. It is worth reproducing his comments on Ireland. The exceptionally unfavourable global economic and financial conditions are making our Irelands own already very difficult domestic economic situation worse. Ireland is now experiencing an unprecedented contraction in output, which is set to persist this year and next. While the initial downturn in activity was driven by the sharp decline in the Irish property and construction sectors, this has now broadened out into a marked weakening of domestic demand, which is being significantly amplified by the contraction in export demand as a result of the movement into recession of all our main trading partners. Reflecting the scale and speed of developments, Irish economic performance has deteriorated markedly – the contraction in activity has deepened significantly, there has been a sharp rise in unemployment and a rapid deterioration in the fiscal position. With the global recession deepening and domestic demand exceptionally weak, the overall outlook for growth has continued to deteriorate in recent months. Based on what is currently known, our latest unpublished estimates suggest that GDP will fall by over 6 per cent this year, with a broadly similar fall likely in the level of employment. This is likely to result in an unemployment rate averaging over 11 per cent for the year. However, risks to this outlook remain to the downside.
No one should be in any doubt about the seriousness of the global situation, which is not easing, and the seriousness of our own difficulties. We face significant challenges and it is critical for present and future generations that we work together now to confront them. If we do so, our economy will recover and has the potential to grow solidly again in the medium term. Our economy’s strengths are important in this respect. We still have favourable demographic trends, there is the capacity for a rebound in productivity growth, the Irish labour market continues to be more flexible than most and at the start of the crisis public debt as a percentage of GDP was low.
Markets are strong today , The Irish Are wining in cheltenham today !
We are meeting C&C new management now. Gotta fly ,
Have a good evening…
Liam
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