what's In Store For Next Week For Stock Markets:- Yesterday Dow Jones fell by 175 points, Nasdaq was also down by few percentage points, volatility continues to be a concern globally for equity markets as more and more banks and financial institutions report huge losses due to subprime exposure. Weak consumer sentiment in the U.S. along with weak labour market conditions is weighing heavy on investor confidance.
It will take time to restore confidance in the minds of investors and traders after what happened in stock markets globally. This typically happens when stocks crash with tremendous velocity and time frame in which it fell is also very short in band. Nervousness will slowly fade when conerns about global economic outlook starts looking brighter and sense that all is not gloom and doom. World Economic Forum currently going on at Davos is also getting heightened mention of subprime crisis and resolve of U.S. authorities to contain it. Markets will be hoping for some concrete announcements to address this crisis. Only rate cuts will not solve this credit default mess, also with Inflation getting a second seat due to subprime mess is another potential threat to global economic outlook. Chinese central bank is also concerned about rising inflation as it's economy is still in above 11% growth more. Containing inflation must come on priority list for most central banks rather than merely concentrating on just increasing liquidity into the financial system. Next few weeks will see volatility in stocks.