Sharp Drop In The Ericsson Share Price

Sharp Drop In The Ericsson Share Price in the yesterdays trading session due to poor earnings show and weak future guidance clearly vindicates the fundamentalist point of view that no matter how irrational stock markets can get, company's results and future outlook still commands respect from the markets. It's therefore in one's own interest to be extremely vigilant about the company's performance and future outlook.

Consolidation

Equity markets across the world are consolidating gains they have made in the past few trading sessions with european,U.S.,asian markets displaying subdued trading sessions.
Market players will also be keenly waiting for U.S.Fed decision on rate cuts this september. Any rate cut will give further boost to emerging markets. Dollar has been under pressure against the yen and euro for the past few days with market players now wanting to buy riskier assets like stocks and dump dollar. Noise levels from U.S. sub-prime mortgage markets has been waining and is a welcome sign.

Commodities Are Cooling

Commodity prices are cooling off for the past few trading sessions and this is a very welcome sign with regards to overall inflation scenario. Also with concerns of U.S. economy slowing down because of lower consumer spending and weak housing sales and serious credit squeeze in the U.S. mortgage market, commodity prices have began to ease of substantially from their recent highs.

However crude oil is still trading above U.S.$70 per barrel for the past few weeks and is a major concern.

Some Stability In The Dow Jones Is Good News

Dow Jones closed 233 points higher on the back of some bottom fishing by market players. Dollar also climbed to 114.20 against the Yen, after falling continously for the past few trading sessions amid yen carry trade un-winding. History is evident that volatile currency movements can play havoc with stock and commodity markets, as seen this time as well. So keeping a very close watch on important currencies is very much desired if one wants to succeed in financial markets.

Manic Selling In The Markets

Markets today fell very sharply fearing more bad news from the cracks in the credit markets and yen carry trade un-winding. Yen got further strength and breached 112 mark against the dollar, creating more panic among investors and that caused japanese stocks to drop very sharply by 850 points. All other asian markets traded extremely weak and later in the trading session got some respite because of lowering of discount rate by U.S.federal reserve and some short covering. European markets opened in the positive territory and this will have good sentimental impact when U.S. markets opens later today.
Keeping extremely close eye and ear on credit markets will be they key going forward. Any bad news from this front in future will significantly damage already brittle investor/trader confidance.