We are noting these headlines from around the world. Repeatedly, financial markets are showing instability and uncertainty. What does this mean? Should it be a red flag to investors and financial managers?
1. Singapore shares close lower on US economic uncertainty -UPDATE: March 05, 2008: 05:20 AM EST SINGAPORE, Mar. 5, 2008 (Thomson Financial delivered by Newstex) -- Singapore shares closed lower for the fifth straight session Wednesday as uncertainty over the health of the US economy continued to weigh on investor sentiment ahead of the release of new economic data later this week.'There is a lot of uncertainty in the market and investors are waiting for clearer signs,' said Goh Mou Lih, research head at Westcomb Securities.
Investors are unlikely to take aggressive positions ahead of the US employment numbers for February that will be released on Friday, the analyst said.Adding to market jitters was the volatile movement of Asian shares during the day due in part to comments by China's Premier Wen Jiabao that the country is facing considerable inflationary pressures.'The market is now trading on day-to-day news, not (based) on direction or trend,' Goh said.
2. UAE SHARES FALL ON US ECONOMIC UNCERTAINTY (MENAFN - Khaleej Times) UAE shares dropped yesterday as economic uncertainty in the US has made investors assume a "wait-and-see" attitude towards the markets. The Dubai bourse fell one per cent to close at 5,804.77 while Abu Dhabi's main index dropped 0.02 per cent at 4,821.55 points."The uncertainty in the US is keeping investors on the side lines," said Sherif Abdel Khalek, head broker at Al Futtaim HC Securities.
He also said in a Bloomberg report: "We are witnessing very low volumes and frankly lack of interest in selling or buying."Investors traded 130.4 million shares on the Dubai Financial Market (DFM) General Index, a far cry from the daily average of 685 million in the past six months. The index posted shares value of Dh714.7 million.Emaar Properties, the largest publicly traded real-estate developer in the Middle East and Africa, declined 1.2 per cent to Dh11.95 from Dh12.10 after it said that the completion of Burj Dubai would be delayed.
3. Gold surges on economic uncertainty: Demand for the precious metal spikes as investors seek shelter from volatility. This glittery commodity may be a good way to diversify your portfolio as prices hit new highs.
NEW YORK -- Gold prices surged Friday as dollar weakness and a brutal selloff on Wall Street sent investors in search of a safe haven. Gold for April delivery settled at $975 an ounce in New York after touching a record trading high of $978.50 at one point during the session. Meanwhile, the U.S. dollar sank to a fresh low against the euro, then regained some ground later in the day.
A number of weak economic reports released earlier this week, along with news of further writedowns by companies with ties to toxic mortgage-backed investments, helped spur demand for the precious metal, according to Jon Nadler, a senior analyst at Kitco Bullion Dealers in Montreal.
Nadler says it is "not inconceivable" to see gold prices reach $1,000 an ounce before the Federal Reserve meets on March 18, depending on what sort of economic data is released between now and then. The gold market "feeds on uncertainty and anxiety," Nadler said. "The continuing debacles are fueling this kind of appetite for alternatives."
Sill, the current highs are nowhere near their heights hit in 1980, he added, when gold prices reached an all-time high of $825.50 on January 21, 1980.