INTERNATIONAL STOCK MARKETS MAY BE CLOSED » Caspian Partnership for the Future

INTERNATIONAL STOCK MARKETS MAY BE CLOSED

U.S. stock futures fell, indicating the market may extend the worst monthly plunge in 70 years, as concern the global economic slowdown is deepening overshadowed speculation the Federal Reserve will cut interest rates, Bloomberg reports.

With equity investors around the world contending with the worst drop since the Great Depression, futures on the Standard & Poor’s 500 Index understated gains or losses by an average 1.4 percentage point in October, twice the gap in the third quarter.
Asian money-market rates rose amid speculation the global credit crisis is worsening even after governments and central banks pledged to spend trillions of dollars worldwide to revive lending.
The pound slid against the dollar and euro after an industry report showed U.K. house prices dropped by the most in at least seven years this month and will keep falling as the economy deteriorates.
The pound fell against all 16 of its most-traded counterparts. It fell 2.4 percent to $1.5351 as of 9:48 a.m. in London, its seventh consecutive drop, from $1.5897 at the end of last week, when its 5.9 percent intraday plunge was the most in at least 37 years. Against the euro, the currency slipped to 80.84 pence, from 79.31. It touched a record low 81.96 pence on Oct. 24.
A collapse in credit markets and the worst housing slump in a generation have buffeted the British economy, Europe’s second-biggest. The U.K. is already in a recession and the economy will contract for the next three quarters, Ernst & Young’s ITEM Club, which uses the same forecasting model as the Treasury, said in a report on Oct. 20.
The London interbank offered rate, or Libor, that banks charge each other for three-month loans in dollars fell 1 basis point to 3.51 percent, according to the British Bankers’ Association. The overnight rate also declined 1 basis point, to 1.27 percent.
In the U.S., Caterpillar, the world’s largest maker of bulldozers and excavators, declined 5.4 percent to $31.50 before the official open of U.S. exchanges. The stock was downgraded to “neutral’’ from “buy’’ at Merrill Lynch & Co.
More than 40 heads of state at a government meeting in Beijing called for an overhaul of World War II-era banking rules, and “pledged to undertake effective and comprehensive reform of the international monetary and financial systems,’’ according to a statement. The two-day summit was the first meeting of Asian and European Union chiefs since calls for coordinated action mounted along with bank failures and plunging stock prices that wiped more than $12 trillion from the market value of shares worldwide this month.
The 236 companies in the S&P 500 that reported third-quarter earnings posted a 23 percent decline on average, according to Bloomberg data. A profit drop for the entire index would mark the fifth straight quarterly decline, the longest stretch since the burst of the dot-com bubble at the start of this decade.
All 48 of the developed and emerging markets tracked by MSCI have fallen in 2008, with 22 losing at least half their value as of last week. Benchmark indexes for Russia, China, Greece, Ireland, Peru and Austria have retreated more than 60 percent and the S&P 500 is down 40 percent.

Trading has been interrupted on exchanges from Indonesia to Iceland over the past month in attempts to stem global declines. Russia’s RTS exchange and Micex Stock Exchange suspended trading on Oct. 24 after slumps of more than 10 percent triggered halts.
The proposal of a one-week interruption in several other international exchanges has climbed to the agenda.

Baku. Vahab Rzayev – APA-ECONOMICS

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