WORLD MARKET ARE IN CAUTIOUS AGAIN - 5 AUG 2006

US market report on 4 Aug 2006, http://yahoo.reuters.com/news/articlehybrid.aspx?type=comktNews&storyID=urn:newsml:reuters.com:20060804:MTFH41239_2006-08-04_22-30-57_N04261350&pageNumber=1&imageid=&cap=&sz=13&WTModLoc=HybArt-C1-ArticlePage1

 

"Rising interest rates are a negative for stocks because they mean higher borrowing costs for corporations and consumers. Worries that U.S. economic growth has slowed too fast also have kept investors on edge.

 

Stocks rallied early on the jobs report, then reversed course to end down slightly as concerns about slowing growth offset optimism about the possible pause in rate hikes."

 

From the article above, we can see that US market is now in cautious on whether FED raise or not raise interest rate on Tuesday meeting. If FED raises interest rate, it has direct negative relationship to US stock market, if FED decides not to raise interest rate, US market may concern on slowing economy which may contribute to weaken company earnings. Therefore, we can see the negative sides on both decision.