Weekly Market Report
Black week for all world stock exchanges
The crisis did not end and the worst didn’t came yet
That’s what I could describe last week as a black week for all stock markets and the global economy, the crisis is still ongoing and did not end and the worst still on the way to hit more global economies
This is described by most analysts around the world as a black week for exchanges and the global economy, clearly floundering and exchanges in the entire world as banks
Large international banks facing financial problems and the bankruptcy of some of them save and lend to others as mortgage companies
At the beginning of week, the U.S. Treasury secretary, Mr. Paulson on Sunday before the opening of international markets that the U.S. government expelled the chief executives of both companies Freddie Mac and Fannie Mae company, as the U.S.government has appointed new executives of the companies selected to be in the hands of the U.S. government to find the cause These two companies because of the mortgage crisis as the two of the largest companies that specialize in real estate loans
Which led to the opening of global markets and the decline of large recording the biggest loss in more than 10 years ago, which led to a loss of investor risk appetite and most of the investors withdraw their money from most world markets so that this crisis also weighed on the markets of all the Arab and especially the Saudi bourse Which is the largest and most Arab stock markets recorded losses recovery has not recorded more than 5 years
In mid-week ago, there were a problem on the horizon, the world's largest bank which is Lehman’s Brothers announced that negotiations with international banks and companies to borrow funds to cover the deficit and liquidity developments but it was unsuccessfully the bank where the use of so-called item No. 13 Of the Charter of international banks which means that the bank declared bankruptcy, which has hit all bourses Laboring again
The U.S. Federal Bank moved more rapidly to pump more than 70 billion dollars in the financial system to cover the liquidity and calm the markets but without avail as all banks in the world to pump liquidity in the financial systems for fear of the collapse of
world markets and an attempt to calm the markets, and the total sum of liquidity which has been pumped in the market including the U.S. Federal 250 billion, which represents a quarter trillion U.S. dollars
At the end of the week, the American International Group (AIG) request for assistance from the U.S. federal bank after if stalled because of mortgage crisis
So the U.S Federal Bank rescue AIG while it announced interest rate decision, the Fed lend AIG a loan of approximately $ 65 billion, provided that the U.S. Federal Bank is running the equivalent of 80% of the assets, including stocks
The U.S Federal Bank made an unexpected move, it leave the interest rate on hold at 2.00% beside there were 80% of financial analyst is expecting that the FED will cut the rate by more than 25 basis point
Dollar Index
The dollar index made a good retracement to 61.8% Fibonacci and back up again but without breaking 23.6% Fibonacci
The US dollar continue the week traveling in a side way trading between 23.6% and 61.8% Fibonacci levels and closed the week above 61.8% Fibonacci level
The most important news this week, U.S. Congress presented a plan to rescue the troubled banks and companies a cost of 700 billion U.S. dollars
The plan came after the bankruptcy of more than 4 companies and many banks requested to lend from the Federal Reserve to solve the mortgage problems
All eyes are now on whether this plan will ease this problem and protect the banks and real estate companies in bankruptcy or insolvency
The market now in anticipation of what impact it will have through this plan
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