Comments on: Global stock indexes running on fumes

By: Graphite

Graphite — Mon, 29 Mar 2010 20:44:51 +0000

Price data is not easy to find, but iron ore is experiencing a huge bubble and the spot market is now trading well above its 2008 peak. A lot of juniors are getting ready to spend vast amounts of capital to tap extremely marginal deposits in Western Australia. This (along with the general commodity rally) probably also has a lot to do with where the Bovespa has gone.

I think copper is still below the December highs but not by much — it seems to me we’ll see new highs before putting in the final top and turning down.

By: rogerjarema

rogerjarema — Mon, 29 Mar 2010 17:51:27 +0000

I know a wee bit of the Indonesian stock market as some relatives live there. During the 2008 crash, the government limited every listed stock’s price decline by 10% per day. That’s why you get a funny chart with gap downs and short candles everyday. The currency dropped about 30% against USD during the crash.

Banking stocks are reaching new highs during the 2009-10 bounce. Banking is the largest sector in the stock market. But apparently, during the full course of 2009, my relative said that people kept complaining banks were unwilling to lend and that their interest rates are so high. No wonder… the government kept selling bonds yielding 10%. At the heights of the 2008 crisis, it was selling dollar-denominated bonds at ludicrously high yields (don’t have the detail here…). Apparently banks there are profiting big time from the govt bonds.

Indonesia was praised as one of the few countries claimed to have survived the GFC well (large positive GDP)… besides China & India and perhaps Brazil.

By: rogerjarema

rogerjarema — Mon, 29 Mar 2010 16:37:17 +0000

Copper is now over 3.50. A new high in this countertrend rally. I guess this is kind of a bad sign for the bearish short-term case.

However, metal stocks mostly don’t make a new high (at least not yet)… so it may create a negative divergence. One particular ETF I’m watching is XME. With another prominent copper stock FCX. I guess this divergence is the best case for the bears.

By: Mike

Mike — Mon, 29 Mar 2010 16:32:05 +0000

Here’s the index chart for Indonesia: http://www.bloomberg.com/apps/cbuilder?ticker1=JCI:IND

I wonder what earnings and dividend yields are here? It’s astounding to see such heights in the markets that fell the hardest from the last time around, as in India and Brazil.

By: Mike

Mike — Mon, 29 Mar 2010 15:55:29 +0000

Wow. It’s the only one that I know of.

By: rogerjarema

rogerjarema — Mon, 29 Mar 2010 15:20:36 +0000

Mike, Indonesian Stock Exchange (JCI:IND — Bloomberg or ^JKSE - Reuters) is on the verge of registering a new high. Is this the only stock market in the world to do so?

2007 high was 2830. Last Friday it closed at 2813.