Happy thanksgiving day .
Unfortunately There is very good possibility the stock market will be down in friday !
Dubai default fears spook investors
By Jamie Chisholm, Global Markets Commentator
Published: November 26 2009 07:09 | Last updated: November 26 2009 21:36
21:20 GMT. Global stock markets endured heavy selling on Thursday as investors were spooked by the spectre of a default by Dubai and after a febrile foreign exchange market saw the yen surge to a 14-year high against the dollar.
The turmoil caused a flight to less risky assets. Gold, which had challenged $1,200 in Asian trading, fell back from its highs and money flowed into havens such as German government bonds.
Banking stocks tumbled on concern about their potential exposure to Dubai. Indeed, the cost of insuring against default by the emirate jumped, with Reuters reporting the Dubai five-year credit default swap being quoted as high as 500-550 basis points. This means it would cost about $500,000 a year to insure $10m of Dubai’s debt. On Tuesday it would have cost about $360,000.
Debt rattle
Americans are having their turkey, but it is the markets that are getting stuffed. The debt worries surrounding Dubai have led investors to reduce their risk appetite. Gold, oil, equities and commodity currencies are down. Haven currencies and triple-A government debt are up. But the crucial test will come when the US markets reopen on Friday. Only then will we know whether Dubai is the genuine catalyst for the long-mooted risky asset correction.
