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Analysis |
 Return Analysis
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World Financial Market for the week of October 1st- 5th, 2007.
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The information on the American labor market has shown an increase of work positions in August by 89 thousand instead of the reduction by 4 thousand announced earlier. 110 thousand work positions were created in September.
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These figures made the stock indexes grow in the whole world. However, for the Dow Jones Index a double peak was formed on the level a little lower than 14,120 points, which shows a probable technical correction. This correction is not likely to last long but so far there are special grounds for continuation of this apparently exponential growth, except the inflation bubble. The growth of prices on energy resources, metals and foodstuffs will surely affect the economic parameters.
It is interesting to note that a simple transfer of prices in the Euro could significantly improve the situation for the energy resources evaluated in the Euro were on average rising in price twice slower. The peculiarity of dollar prices is that the American currency is losing not only its rate value but also its purchasing ability. The US financial authorities are using the press machine more and more often, producing more and more cheap money, which results in a hysteric growth of almost all prices.
There is a slight correction in the crude oil market, but before winter we cannot expect a significant reduction of prices. The metal prices grow, particularly lead prices due to a constant deficiency of this metal in the market over the last five years.
The resolution by the ECB and the Bank of England not to change the rates were expected and did not have a strong impact on the European stock markets. However, the inflation pressure in Europe will increase and the necessity of rates increase will face the financial authorities. On the other hand, there is a risk of economic slow down and the rate increase can make this risk higher.
Analyzing the gold market one may suggest the continuation of growth in the mid-term perspective to 800 dollars per troy ounce. In the long term perspective, the prices may exceed 1,000 dollars per ounce.
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