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Monday, November 10, 2008

BetOnMarkets Afternoon Report

Global stock markets certainly got out of the right side of bet this
morning and unlike the volatile days of October have so far managed to
hold on to those gains. The catalyst for today's optimism is the same
catalyst as the pre credit crunch market boom; China. The Chinese
stimulus package has lifted global stock markets with commodities such
as oil and metals the primary gainers. China needed record levels of raw
materials to fuel it's powerful growth spurt over the last 5 years and
fears of a slow down in china specifically have been a significant
reason for the reason falls in commodities since their peak last year.
Energy and natural resource stocks are understandably the biggest
gainers today as traders speculate that a floor might finally have been
found in the oil bear market. Who would have thought that 'oil' and
'bear market' would have been uttered in the same sentence at the start
of the year.

Elsewhere, financial stocks are mixed despite 3 month libor falling to
its lowest level since 2004. Confidence in the credit markets is
increasing as the various central bank interventions continue to grease
the wheels of the rusted apparatus. However, financial stocks are still
underperforming today overall. News that AIG's bail out package is now
70% higher at $125 billion has hurt sentiment in other financial
companies. Investors are still holding onto their cash on the fear that
another round of bailouts or fresh cash calls are just around the
corner. Most financial firms are safer than at any time during the last
year with the various government guarantees, but further bailouts or
special loans could further dilute share holder returns.