My goal is for my followers to get a quick overview of what made newslines during the day and save you time. I hope you all enjoy it. So at the end of the week I will be posting the links to each one in case you too busy to see them during the week.
The week started off on a sombre note for Lonmin where the price rout continue to dig heavily into shareholder value as concerns that debts that were due to be serviced next year wouldn't be on the account of a huge cash drain on the balance sheet. Thankful Thursday and Friday's price action suggested that investors were feeling a little more confident with news that the company is working with Greenhill Co, a company which it had previously worked with in 2012 to help avoid financial catastrophe.
Worries over Chinese state of economy dominated sentiment again this week. The frantic intervention from government has lead many to believe that all is not well in the world's second largest economy. As a result we have seen a prolonged offload of commodity stocks over the last year. However there was a slight rebound in commodities when the FOMC minutes came out and came across less hawkish than expected which softened the dollar to a certain extent. But late on Friday Fed President of St. Louis, James Bullard came out with tough talk insisting that the market expectation on interest rate hikes this year is nowhere near where it should be which caused a frantic scramble.
As a result we saw main US indices ending the day and week heavily in the red. According to CNBC, the Dow Jones Industrial Average has officially entered correction territory for the first time in 4 years with a drop of 10% from highs made during the year. The S&P 500 closed 3.2% down to end below the all important 2000 mark which could spell danger in the coming weeks.
Rumours were abound much of the week with the first one proving to be true, with Greece Prime Minister Alexis Tsipras resigning and calling an early election due to lack of support from his party effectively tying his hands of power needed to make necessary reforms to save Greece's dying economy. The next was a rumour that the Chinese government might be dropping the RRR (Reserve Rate Requirement) to help aid it's own growth dilemma. If it does prove true it'll be yet another last ditch attempt plug holes in a financial system filled with bubbles all around.
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