2010 Week 1 market

Making up for last Sunday's writing.

Week 1 of 2010 ended on positive notes... Bulls in charge for the week globally. Global equity indices ended higher by Friday. Oil price broke $83 and Gold traded in the range of 1110 and 1120 as USD index maintained its strength.

No major downside surprises during the week but at weekend news of potential JAL bankruptcy filing came out (on Monday the news did some damage to Japanese market however was contained).

US bond yield continue to drift higher... 10-yr yield moved up to 3.85% by Friday and i think it's at 10-month high. News of faster-than-expected US recovery and inflation concern seem to have dominated the market for the week.

Most notable equity sector performance is energy related stocks. Conocophilips, China Oilfield services, EZRA, Rotary engineering all appreciated in the range of 10 to 25%.

On China announcement of measures to curb property speculation (mainly to 2nd home buyers by increasing installment to no less than 40%) did not make big impact on equity market. Eyes were on new year's monetary policy and government signaled tightening by increasing 3-mo bill yield. (More news broke out on Tues of the Week 2 that PBOC's increased deposit reserve by 0.5%). - It's evident that China is shifting policy gradually amid rapid price increases (not just housing, food, gasoline... too)

(Major news coming out of China on Sunday was December export number up 17.7% which is a big positive surprise. will see next a few months)

So the momentum has continued (in fact too buoyant) and i have no major change in view of the market direction.