which managed to surge the Libor rates to extreme high levels, resulting from the prolonged Credit Squeeze. It turned out that banks did not really use this money in order to bolster the financial sector and ease the lending, where it was obvious that acquisitions and mergers took place using those money.
Due to this endless criticism Obama is about to release out some regulations in order to push banks into lending out money to markets to ease the tensions. Its been like almost two weeks since Obama was inaugurated and major changes are taking in place, new bailouts are about to be introduced and regulations to financial markets. Though the percentage of failure is wide, because now markets are not just facing a deteriorating financial market but now recession is the highlight of the year, where we saw last week the United States fourth quarter GDP contracting 3.8%.
But the endless deterioration and the continues earnings weakness had pushed the US indices in the red area sealing January with major losses, Dow Jones industrial average fell 1.82% or 148.15 points reaching to 8000.86 levels closing the month trading with 8.84% in losses; S&P 500 fell 2.28% or 19.26 points reaching to 825.88 levels losing a total of 8.57% earlier this month; NASDAQ fell 2.08% or 31.42 points reaching to 1476.42 levels.
The fears of deepening recession diffused into the Asian markets, where Nikkei Index lost 1.50% or 120.07 points reaching 7873.98 levels, and Hong Kong's Hang Seng had lost 3.62% or 481.11 points reaching 12794.95 levels reaching to a total of 11.11% since the beginning of the year.
Markets across the globe are waiting for this week fundamentals, where we call it the Non Farm Payroll Week. It's widely watched because markets had witnessed in the prior year enormous job terminations after the manufacturing and the banking sector had stalled widely. A total of 2.59 million jobs were terminated, the levels of unemployment rates had surged to the levels that the spending and the economic activity stalled.
The start will be with the US ISM manufacturing reading which will be released by the Institute for Supply Management; a continuous stall is manufacturing sector will be obvious today, the range of expectations in markets fall between high of 36.0 and a low of 32.7. Pessimistic analysts expect to see more weakness in the economy where the economic slowdown and the deteriorating incomes had curbed the levels of demand.
Yet before the ISM Manufacturing will see the Personal Income and Personal Spending reading, where according to estimates the spending fell 0.9% in December along with Income which had slipped to -0.4% from the previous -0.2%.
It's widely expected, the long lost confidence especially after the Credit Crisis intensified had managed in downgrading the levels of incomes received by workers in companies, which is a result from the continuous weakness in the earnings levels, where on Friday markets witnessed below than markets estimates earnings in Procter & Gamble and Caterpillars.
Due to this gloomy forecast the US Future indices fell; Future Dow Jones fell 79 points reaching to 7876 levels, along with S&P 500 fell 8.40 points reaching to 814.10 levels and Future NASDAQ prices lost 12.50 points reaching to 1166.75 levels.
Economies continue to struggle and a recovery won't be seen anytime soon, where with the obvious tumbling in markets a recovery had been postponed till later this year.