Latecomers can create even a few surprises

It will be difficult to forget the month of October 2008. Financial markets have failed to register their worse historic performance as a percentage. Point, it is indisputable for the Dow Jones with 1.525,65 rendered points. A week of the end, indices took the path of the disaster, before finally bounce and certainly show important but not record loss. The Dow Jones was thus unscrewed 14,06, while his point, he lost 27,35 from its level of the end of September. Record of September 1931, in full depression, is therefore always. Wall Street plunged then from 30,92. In the end, he does even beats not score of August 1998, during the Russian crisis, it had assigned 15,13. The last four sessions, with a 14,51 gain, saved it the Berezina.

Same observation for the CAC 40. The lighthouse of the Paris stock exchange index retreated up to 26,61, complete loss of 13,52 withdrawal however from August 1990 ( 14,01), during the invasion of Kuwait by the Iraq. This is its fourth worst performance in twenty years of existence.

Undoubtedly, this crisis will be a model for volatility. Master word of the period on the market, the volatility has peaked in October. Market is there acted as désarticulés puppets, without real direction and without limits. The fundamentals have disappeared from logic to management. More than half of the values of the CAC 40 traded below their net assets. Sessions to more than 10 of amplitude have become a common phenomenon. Between the two extremes of the month, the CAC 40 tumbled more of 1,150 points. And the Dow Jones industrial average of 3,000 points!

Fears remain

If investors have become aware of exaggeration and somewhat rectified shooting, fears about the Economic Outlook have not left them. The gesture of the US Federal Reserve (Fed), a drop of 50 points of base interest rates, Wednesday, came the reminder. The wave of week statistics agreed in this sense. The GDP in the third quarter, certainly less bad than expected, has dwindled by 0.3. Consumption expenditure of households, the Michigan consumer confidence and Chicago purchasing managers index declined.

The week that opens is not relaxing in terms of statistics. Today, operators will have to assess the economic situation through the Manufacturing ISM, always in the area of contraction in activity. Tomorrow, they will discover the industrial controls, on Wednesday, the non-manufacturing ISM, Thursday, Friday and wage costs, the dreaded report on employment in October, while announcements of social plans, have multiplied in recent weeks, including those of Nissan, Motorola, BASF, and American Express.

Economic hazards, is a major political uncertainty. Obama or McCain Choice tomorrow for the new American President will have an impact on the orientation of the economic and social of the world's power policy, even if the two candidates endorsed Paulson's Bank rescue plan.

In Europe, conditions are much more favourable. The recession is indeed there. Confidence of households and patterns is in berne. Inflation flows quickly. For economists, there is therefore no doubt that the European Central Bank (ECB) and the Bank of England will imitate the Fed which is it now to the limits of the exercise, with a rate of 1. Already on 8 October, in a concerted action by central banks, the ECB had lowered by 50 basis points rate to 3.75. Economists are betting for a gesture of same magnitude, Thursday.

Rough week

On the business front, the period of the quarterly results is going to end. Latecomers can create even a few surprises. The crisis has consequences on their activity. First affected, banks are not yet out of the rut, although there was a marked improvement on the interbank markets. Friday, Freedom Bank went bankrupt, the seventeenth in the United States in 2008. In other sectors, difficulties gathering. The automotive industry is experiencing plant closures. So that the week will be turbulent. And that volatility could reach again records.